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.