Air Canada and Transat announce Increased Purchase Price to $18 per Share

[FL320]

AT could fail before any of this even has the chance to go through. We're still looking at 2 more months before the gvn't gives it's result, and I'm sure it's the last thing on their mind right now.

Now... I could see the gvn't doing something like they did with Canadian and AC, force AC take on AT like they did Canadian and in exchange for a big bail out or something and promises that they can keep all their slots. This would go over well with QC for the next election and people keeping their jobs.

I strongly suggest you to buy TRZ shares asap...

Be prepared for wage concessions.

Yes but I will soon gain 10 years pre-retirement

[dialdriver]

LOL.

If after all this shit of dealing with lowest paid positions in the industry AND CR tries taking more?

I'm fucking done.

I'll going back to hooking at Hastings and Main.

Was that you?

[derateNO]

Daddy?

[dialdriver]

Daddy?

I really need to stay off of here...

[TSAM]

.

[rudder]

I cannot find a specific reference to an MAC clause (Material Adverse Condition) for AC in the information issued by AC in June 2019 related to the original purchase agreement.

However, it is clear that the consummation of the deal is subject to regulatory approval. If the CT finds excess market concentration and orders route divestiture or consolidated capacity limitations that may be a valid reason for AC to void the offer.

[TFTMB heavy]

The Competition Bureau report will only contain facts, that report is then taken by Transport Canada who will produce a report with recommendations and hand it to the Minister of Transport who in turn will issue his recommendations on the transaction. In the end Garneau will have the last word regardless of what any of the reports contain.

Analysts are still favourable to the transaction and lawyers still say the the Adverse Material Effects have not been met. That makes me think we are still heading towards the deal closing.

[FL-280]

Keep hoping there bud.... TRZ was under 6$ this morning

[FL320]

Keep hoping there bud.... TRZ was under 6$ this morning

It does not mean anything except that it's another incredible short term opportunity for investment! Thank you AC! (happy DerateNo?)

[TFTMB heavy]

Keep hoping there bud.... TRZ was under 6$ this morning

AC went down to $15.51, still doesn't meet the definition of adverse material effect from what I was told. Nothing we say on here will change anything but carry on with whatever makes you feel better.

[ahramin]

"Material Adverse Effect" means any change, event, occurrence, effect, state of facts and/or circumstance that, individually or in the aggregate with other such changes, events, occurrences, effects, states of facts or circumstances is or would reasonably be expected to be material and adverse to the business, operations, results of operations, assets, properties, financial condition, liabilities (contingent or otherwise) of the Corporation and its Subsidiaries, taken as a whole, except any such change, event, occurrence, effect, state of facts or circumstance resulting from or arising in connection with:

(a) any change, event, occurrence, effect, state of facts or circumstance affecting
generally the airline industry or the segments of the travel, hotel and tourism
industries in which the Corporation and its Subsidiaries operate;

but, in the case of clauses (a) through to and including (e) above, only to the extent that any
such change, event, occurrence, effect, state of facts or circumstances does not have a
materially disproportionate effect on the Corporation and its Subsidiaries, taken as a whole,
relative to other entities operating in the airline industry or the segments of the travel, hotel
and tourism industries in which the Corporation and its Subsidiaries operate; and references
in certain sections of this Agreement to dollar amounts are not intended to be, and shall not
be deemed to be, illustrative or interpretative for purposes of determining whether a Material
Adverse Effect has occurred.

A Material Adverse Effect caused by an industry downturn has to hit Transat disproportionately in order to trigger the Material Adverse Effect clause in the Arrangement Agreement from June 27, 2019. If AC wants out of the deal it will have to be in some other way. Curiously, if you go back 3 months to before coronavirus was in the news, AC and TRZ have fallen almost exactly the same amount (63%). US airlines have been doing massive share buybacks over the last 10 years, leaving them with little cash to weather a downturn. Last year US Airline CEOs were explaining to their shareholders that this is a great move since it's not possible for big airlines to lose money anymore. In the meantime, AC has piled up over 7 billion in cash and Transat over half a billion.

In any case, TRZ shares are a big gamble right now, with a huge potential win or loss. I certainly wouldn't buy shares without having read the Agreement and watching the news very closely. You'll probably still be blindsided by the insiders but at least you did what you could.

[TFTMB heavy]

"Material Adverse Effect" means any change, event, occurrence, effect, state of facts and/or circumstance that, individually or in the aggregate with other such changes, events, occurrences, effects, states of facts or circumstances is or would reasonably be expected to be material and adverse to the business, operations, results of operations, assets, properties, financial condition, liabilities (contingent or otherwise) of the Corporation and its Subsidiaries, taken as a whole, except any such change, event, occurrence, effect, state of facts or circumstance resulting from or arising in connection with:

(a) any change, event, occurrence, effect, state of facts or circumstance affecting
generally the airline industry or the segments of the travel, hotel and tourism
industries in which the Corporation and its Subsidiaries operate;

but, in the case of clauses (a) through to and including (e) above, only to the extent that any
such change, event, occurrence, effect, state of facts or circumstances does not have a
materially disproportionate effect on the Corporation and its Subsidiaries, taken as a whole,
relative to other entities operating in the airline industry or the segments of the travel, hotel
and tourism industries in which the Corporation and its Subsidiaries operate; and references
in certain sections of this Agreement to dollar amounts are not intended to be, and shall not
be deemed to be, illustrative or interpretative for purposes of determining whether a Material
Adverse Effect has occurred.

A Material Adverse Effect caused by an industry downturn has to hit Transat disproportionately in order to trigger the Material Adverse Effect clause in the Arrangement Agreement from June 27, 2019. If AC wants out of the deal it will have to be in some other way. Curiously, if you go back 3 months to before coronavirus was in the news, AC and TRZ have fallen almost exactly the same amount (63%). US airlines have been doing massive share buybacks over the last 10 years, leaving them with little cash to weather a downturn. Last year US Airline CEOs were explaining to their shareholders that this is a great move since it's not possible for big airlines to lose money anymore. In the meantime, AC has piled up over 7 billion in cash and Transat over half a billion.

In any case, TRZ shares are a big gamble right now, with a huge potential win or loss. I certainly wouldn't buy shares without having read the Agreement and watching the news very closely. You'll probably still be blindsided by the insiders but at least you did what you could.

Statements full of facts and devoid of irrational emotional ramblings are not well received around here. Brace for some irrational emotional rambling.

[FL-280]

Man, Here is the deal. At the end of the day AC will do what AC WANTS TO DO.... you guys are like “we don’t want this as much as you guys don’t” Clearly not... you wouldn’t be stating fine prints of the if not.
I believe you guys are holding on to the last hope of sustainability in your careers as hard as you can. When the last hope relies on another company buying yours, it says a lot about your career choices.

Best of luck

[Hangry]

I for one enjoy a back and forth troll fest from time to time.

This isn’t that time. Lots of pilots are going to feel some real hurt. Of course they are afraid. I’m afraid. We all should be.

Let’s hope for the best. If the deal goes through it’ll be a good thing that a bunch of pilots didn’t lose their jobs.

Good luck to all.

[TFTMB heavy]

Man, Here is the deal. At the end of the day AC will do what AC WANTS TO DO.... you guys are like “we don’t want this as much as you guys don’t” Clearly not... you wouldn’t be stating fine prints of the if not.
I believe you guys are holding on to the last hope of sustainability in your careers as hard as you can. When the last hope relies on another company buying yours, it says a lot about your career choices.

Best of luck

You are lumping everyone into the same basket and that says a lot about you. You are right that AC will do what they want, I don't think anyone is disputing that. Will they have to pay the 40 million penalty is the whole point of the adverse material effect discussion. The quote about the press release was very misleading as it was in the standard warning at the end. Nothing wrong with setting the facts straight.

TS pilots are in the process of voting on a LOU that will prevent layoffs for the next two months if it is ratified. Our group has seen many layoffs over the years and the company has been very resilient thought the many crisis it has survived. We are hoping for the best for us and all other pilot groups affected.

BTW,I stand by every carrier choice I have ever made, good or bad. 23 years and counting and I enjoy it more than ever.

[ahramin]

TS pilots are in the process of voting on a LOU that will prevent layoffs for the next two months if it is ratified. Our group has seen many layoffs over the years and the company has been very resilient thought the many crisis it has survived. We are hoping for the best for us and all other pilot groups affected.

I don't see anything in LOU19 that prevents layoffs. It will hopefully reduce layoffs.

As for irrational ramblings, why are you feeding the trolls? Doesn't sound rational to me.

[TFTMB heavy]

TS pilots are in the process of voting on a LOU that will prevent layoffs for the next two months if it is ratified. Our group has seen many layoffs over the years and the company has been very resilient thought the many crisis it has survived. We are hoping for the best for us and all other pilot groups affected.

I don't see anything in LOU19 that prevents layoffs. It will hopefully reduce layoffs.

As for irrational ramblings, why are you feeding the trolls? Doesn't sound rational to me.

You are right about LOU 19, it did buy us until May 1 for now though as per the MEC's email. Things are evolving very quickly and who knows what will happen? Regardless, I'm glad the MEC is being proactive and that membership is reacting favourably.

I don't see that poster as a troll, more as someone that ignores the facts and is emotional about the merge. Nothing wrong with giving information, some reasonable people might appreciate it.

[iflyroads]

Rumblings of the deal being revisited or renegotiated.


This post is not meant to sow any discourse. Just passing on what I heard. I know the competition bureau is supposed to rule soon on it.

May just be a defferal on when it will close.

[tsgas]

Rumblings of the deal being revisited or renegotiated.


This post is not meant to sow any discourse. Just passing on what I heard. I know the competition bureau is supposed to rule soon on it.

May just be a defferal on when it will close.

If ever.

[C-GGGQ]

Keep hoping there bud.... TRZ was under 6$ this morning

It’s down from a couple of months ago yes but it’s still up over the last year and the last 5.

[Dockjock]

What’s stopping AC from going into the public market and buying shares at market price? The agreement is to buy all outstanding shares at $18. I’m not sure this is possible from a corporate governance standpoint, and an ownership stake above 10% would need to be disclosed as soon as it occurred (wouldn’t that be bullish), but say you liked something at $18, well you love it at $7. Buy buy buy. Also, would it not have been normal to hedge one’s offer with options? They do it with oil. Not sure how possible this is with a small Canadian company like TS. But if you commit to a price and then have to wait a year for it to close- hedge. Not sure if this occurred.

For the following reasons I think this proceeds.

Quebec politics
TS prospects if AC backs out (hugely negative)
AC optics for pulling away the life preserver
Quebec politics
Newish fleet
Take out a competitor
Need pilots (eventually)
AC can close rouge, park 767
If anything, merger of rouge/TS becomes easier with rouge shut earlier than expected. Use the crisis, get A330 at LCC (win for AC).
TS summer flying is toast
Quebec politics
Government decision to approve deal takes on new flavour, when alternative is failure of one of the parties or bailing out a company with very uncertain prospects going forward.


Complications
What if Sunwing fails- approving a merger of AC/TS would almost necessitate saving Sunwing. Maybe ONEX saves Sunwing?
Deal can definitely go through, but TS equity is worthless. Rovinescu does not have a history of losing. Could foresee a scenario where AC “saves” TS, cheers all around, Quebec government and oligarchs get their money and everyone else gets screwed.

[rudder]

What’s stopping AC from going into the public market and buying shares at market price? The agreement is to buy all outstanding shares at $18. I’m not sure this is possible from a corporate governance standpoint, and an ownership stake above 10% would need to be disclosed as soon as it occurred (wouldn’t that be bullish), but say you liked something at $18, well you love it at $7. Buy buy buy. Also, would it not have been normal to hedge one’s offer with options? They do it with oil. Not sure how possible this is with a small Canadian company like TS. But if you commit to a price and then have to wait a year for it to close- hedge. Not sure if this occurred.

For the following reasons I think this proceeds.

Quebec politics
TS prospects if AC backs out (hugely negative)
AC optics for pulling away the life preserver
Quebec politics
Newish fleet
Take out a competitor
Need pilots (eventually)
AC can close rouge, park 767
If anything, merger of rouge/TS becomes easier with rouge shut earlier than expected. Use the crisis, get A330 at LCC (win for AC).
TS summer flying is toast
Quebec politics
Government decision to approve deal takes on new flavour, when alternative is failure of one of the parties or bailing out a company with very uncertain prospects going forward.


Complications
What if Sunwing fails- approving a merger of AC/TS would almost necessitate saving Sunwing. Maybe ONEX saves Sunwing?
Deal can definitely go through, but TS equity is worthless. Rovinescu does not have a history of losing. Could foresee a scenario where AC “saves” TS, cheers all around, Quebec government and oligarchs get their money and everyone else gets screwed.

Depending on the terms of the airline aid portion of the the Federal COVID-19 economic package, AC could end up getting TS for free. AC pays $72OMM. The feds pay AC back through aid grants.

Sad part is the TRZ shareholders (including JM Eustache who holds 1% of the TRZ stock) get bailed out.

Welcome to politics.

[Sharklasers]

I think a painful merger is all but certain now for the reasons listed above.
Transat brings nothing to the table. No forward bookings, all that ‘cash’ they like to tell you about will be all burned through before this deal is ever approved.

[goldeneagle]

What’s stopping AC from going into the public market and buying shares at market price?

Purchase agreements of this type typically prohibit open market purchases after the deal is made public. If they were to start buying at this depressed price then there is a strong case for charges of insider trading because nobody knows the trajectory of the deal better than Air Canada executives.

[Jean-Pierre]

I wonder if the competition bureau report that was due today will be delayed. Sunwing being bankrupt or close to it must be a big consideration if they will allow AC to buy TS and essentially have a monopoly on that kind of vacation travel.