Sharklasers wrote: ↑Mon May 25, 2020 7:49 am
The fact that AC refused to make concessions to the European regulators is really telling as to their level of commitment to the deal, market is responding as well.
They say both companies; be careful to the confirmation bias
What say on concessions would the purchasee get?
This is not good news for Transat no matter how you slice it.
Probably the best outcome or news that Transat could get so far in the current situation; delays. There is no way AC would be able to absorb the transaction right now (mid-2020 was the estimate initially).
Holding on and waiting for an extra 4 months will be hard for Transat I guess, but at least it gives them a chance to return to a better social/financial environment that would make the acquisition viable.
But definitely raising big question marks on the outcome of this transaction.
Kapitanov wrote: ↑Mon May 25, 2020 8:05 am
Probably the best outcome or news that Transat could get so far in the current situation; delays. There is no way AC would be able to absorb the transaction right now (mid-2020 was the estimate initially).
Holding on and waiting for an extra 4 months will be hard for Transat I guess, but at least it gives them a chance to return to a better social/financial environment that would make the acquisition viable.
But definitely raising big question marks on the outcome of this transaction.
The longer this goes out, the worst the balance sheet transat will have (just like all airlines i guess). There will be close to zero revenue for LCC's like TRZ this summer. Its actually not good at all the longer this plays out for TRZ.
Kapitanov wrote: ↑Mon May 25, 2020 8:05 am
Probably the best outcome or news that Transat could get so far in the current situation; delays. There is no way AC would be able to absorb the transaction right now (mid-2020 was the estimate initially).
Holding on and waiting for an extra 4 months will be hard for Transat I guess, but at least it gives them a chance to return to a better social/financial environment that would make the acquisition viable.
But definitely raising big question marks on the outcome of this transaction.
The longer this goes out, the worst the balance sheet transat will have (just like all airlines i guess). There will be close to zero revenue for LCC's like TRZ this summer. Its actually not good at all the longer this plays out for TRZ.
Totally true. But it's either AC pulls out of the transaction right now or Transat waits and hope for the best. Even if their balance sheet takes a huge hit by waiting, at least there is still a (small?) chance that AC buys them (at a lower price probably). Next Transat earnings release on June 11th if I'm not mistaken will be a turning point in my opinion.
Don't read too much into it .. it's just posturing.
The final decision rest with Garneau and the government .. he approved the Canadian North/First Air merger and that deal did create a monopoly. I have a feeling this deal is going to get the green light as a measure to help the health of the industry and part of a stimulus package, courtesy of the member from Papineau.
Localizer wrote: ↑Mon May 25, 2020 8:49 am
Don't read too much into it .. it's just posturing.
The final decision rest with Garneau and the government .. he approved the Canadian North/First Air merger and that deal did create a monopoly. I have a feeling this deal is going to get the green light as a measure to help the health of the industry and part of a stimulus package, courtesy of the member from Papineau.
Government is always the wildcard, but the TRZ stock price certainly didn’t like the news today.
Localizer wrote: ↑Mon May 25, 2020 8:49 am
Don't read too much into it .. it's just posturing.
The final decision rest with Garneau and the government .
It's clear the EU wants concessions. That first of all will give AC an out, assuming they want one.
Two the EU's approval is just as important as Garneau's. Either has the ability to kibosh the deal. The EU doesn't have the political baggage that Garneau does. If they have any baggage it will likely be their own version of home field advantage. Maybe Air France concerns. The EU’s involvement makes this nothing like the Canadian North/First Air merger where Garneau did have the final say.
I would suggest the final decision does not rest with the Canadian federal government. I would say more so the EU, but ultimately AC. Certainly the Federal Government is a piece of the equation. But I don’t think they will be the toughest link. I think they are politically motivated to be pretty much be a sure thing. It’s the other two links that are a concern.
Localizer wrote: ↑Mon May 25, 2020 8:49 am
Don't read too much into it .. it's just posturing.
The final decision rest with Garneau and the government .. he approved the Canadian North/First Air merger and that deal did create a monopoly. I have a feeling this deal is going to get the green light as a measure to help the health of the industry and part of a stimulus package, courtesy of the member from Papineau.
Localizer wrote: ↑Mon May 25, 2020 8:49 am
Don't read too much into it .. it's just posturing.
The final decision rest with Garneau and the government .. he approved the Canadian North/First Air merger and that deal did create a monopoly. I have a feeling this deal is going to get the green light as a measure to help the health of the industry and part of a stimulus package, courtesy of the member from Papineau.
Final decision rests with AC. Period.
Seems AC wants the cheap out. 20 million if the deal fails to get regulatory approval.
Its clear that the EU isnt 'just posturing' if the merger proceeds against the commission and is found in violation of their anti-trust legislation AC will face heavy fines and a possible ban on flying into europe. They wont risk that to acquire a failed airline and their associated baggage.
Of course it’s still possible. It’s just significantly less likely than it was yesterday, especially in light of the European commissions statement regard the unwillingness of the companies to agree to their concessions. Those required concessions are unlikely to change between now and September.
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Last edited by Sharklasers on Mon May 25, 2020 2:33 pm, edited 1 time in total.
Whether you’re in favor or against the purchase; am I the only one thinking that this is an abuse from the European Commission ? How come they have so much power to interfere in a deal that is happening between 2 Canadian companies? Plus the fact that they had plenty of time to look at this transaction...
I wish Canada would drastically reduce all the slots they offer to all these European airlines coming here.
FL320 wrote: ↑Mon May 25, 2020 3:02 pm
Whether you’re in favor or against the purchase; am I the only one thinking that this is an abuse from the European Commission ? How come they have so much power to interfere in a deal that is happening between 2 Canadian companies? Plus the fact that they had plenty of time to look at this transaction...
I wish Canada would drastically reduce all the slots they offer to all these European airlines coming here.
No. If two EU airlines proposed a merge their impact on the Canadian market would be assessed on routes to and from Canada. They are not over reaching.
The timing is interesting. It’s almost like they are saying don’t waste my time. The deal can be extended for 3 months from June 27 to September 27. The EU chose September 30. Is that coincidence?
Remember the EU did respond in the time frame that was expected. It was AC and Transat that refused to offer compromises according to the EU.
The European Commission said the companies had declined to offer concessions to address its concerns during its preliminary review of the deal. It set a Sept. 30 deadline for its decision.
That decision seems to have led to the need for further examination and a time frame extension
The European Commission said the companies had declined to offer concessions to address its concerns during its preliminary review of the deal. It set a Sept. 30 deadline for its decision.
So Transat felt they were better off to stay competitors rather than give in to EU's concessions. Pretty telling of how a company views itself. Likely they won't be willing to negotiate for any price either at this rate. Perhaps they see an angle to compete on the routes with their A321 NEO LR's. Cause what's the competition going to do? Reinstate clapped out retired 767's on those routes? Try the Seat limited A220's? The maxes are a wild card.
I see this whole EU thing as nothing different than Canada's rules on why Swiss can only go to YUL and Lufthansa can only go to YVR and YYZ while SAS isn't allowed into Canada, and AC lifts the rest of that specific network. It will work itself out.
It was never going to be easy mingling a leader in leisure travel with a star alliance network. I'm sure TUI is shitting a few thanksgiving size bricks as we speak.
You think AT was asked to give concessions? May I remind you the are the purchasee and not the purchaser?
The only one having to give concessions would be AC as they would own all flying fir AT / AC.
AC will not give concessions to the european market plain and simple, SPECIALLY slot to destinations like LHR or CDG.
I expect AT to have 325-400 Million in Cash at closing of Q1. And about 90-120 days left until cash hits zero from close of Q1. Between August-September, I fully expect a CCAA filling.
Just my opinion, bash me as you wish. Q1 is june 11th we will have the real numbers then
Maybe it's a translation thing or just the reporter's syntax.
Transat feeling it's better to be competitors? Compete with their 321s? That's not how it's going, the only one calling the concessions it would be willing to take would be AC.
And I don't believe there are any Canadian rules that prohibit SAS/Swiss/LH or any Canada/EU open skies airline from flying routes into any Canadian point to any point in Europe.
FL-280 wrote: ↑Tue May 26, 2020 6:32 am
I expect AT to have 325-400 Million in Cash at closing of Q1. And about 90-120 days left until cash hits zero from close of Q1. Between August-September, I fully expect a CCAA filling.
Just my opinion, bash me as you wish. Q1 is june 11th we will have the real numbers then
I have no guidance of cash on hand for TRZ but I think that the daily cash burn rate may be lower than you have suggested.
Having said that, if a CCAA filing is made with zero cash on hand and no debtor-in-possession financing in place then the result will not be court protection from creditors during restructuring but rather a court supervised liquidation.
A CCAA filing would most certainly meet the criteria for Material Adverse Event.
FL-280 wrote: ↑Tue May 26, 2020 6:32 am
You think AT was asked to give concessions? May I remind you the are the purchasee and not the purchaser?
The only one having to give concessions would be AC as they would own all flying fir AT / AC.
AC will not give concessions to the european market plain and simple, SPECIALLY slot to destinations like LHR or CDG.
I expect AT to have 325-400 Million in Cash at closing of Q1. And about 90-120 days left until cash hits zero from close of Q1. Between August-September, I fully expect a CCAA filling.
Just my opinion, bash me as you wish. Q1 is june 11th we will have the real numbers then
Tuff First Q1 But trust me the Burn is wayyyyy Lower Than you Think!Wayyyyy Lower!AT is in A good Holding Patern!
