13 AUG 2019: Quebec’s securities tribunal has barred Group Mach’s offer to buy up Transat shares, halting their bid to block the tour operator’s sale to Air Canada. The decision means the Montreal developer is not allowed to acquire any shares under its scheme and is also forbidden from using any proxies associated with shares deposited.

Group Mach had offered $14 per share in an effort to derail a pending acquisition of the company by Air Canada. It had hoped to secure the shares and then vote against Air Canada’s offer, which requires at least two-thirds support from shareholders.

However, Air Canada raised its friendly takeover offer for Transat on the weekend to $18 per share from $13 to win the support of Transat’s largest shareholder, investment firm Letko Brosseau.

Shareholders are slated to vote on the Air Canada offer Aug. 23, which is expected to face in-tense scrutiny from the Competition Bureau and other regulatory authorities.

Air Canada and Transat command a combined 60 percent slice of the transatlantic market from Canada, overlap on some sun destinations and maintain a firm hold on Montreal air travel.

However, Transat has posted net losses two of the last three years, with a loss of nearly $20 mil-lion forecast for 2019, according to financial markets data firm Refinitiv.

Air Transat pilots, represented by the Air Line Pilots Association, said Friday –before the new offer emerged – that they support the Air Canada acquisition, citing “greater labour protections and job security.”

The would-be deal sent Transat shares soaring by $4.96 or nearly 42 percent to close Monday at $16.77, their highest price in more than eight years.

GROUP MACH

Group Mach chief executive Vincent Chiara called the Transat board’s endorsement of the original Air Canada bid “disturbing.”

“They still need to be accountable to shareholders on why they pushed that $13-per-share offer like they pushed it,” Chiara told The Canadian Press.

“God knows had we not did what we did, this deal was done at 13 bucks. There was no other offer. So Air Canada was going to walk away paying $200 million less to this company than they should have or could have.”

Chiara said he has received calls from interested parties about making a rival joint bid – “but I’m not sure we’re ready to go there.”

“We’re not ready to make a decision yet,” he said. “But I’ve got to admit this is a real offer. This is finally a real offer.”

Transat has agreed to an increased break-fee of $40 million, while Air Canada’s break-fee remains $40 million.

Analyst Doug Taylor of Canaccord Genuity said Air Canada’s bid “has a high potential of achieving the necessary shareholder support.”

“The deal is still not a foregone conclusion,” he added.