Chorus to be sold ?

[the-minister31]

If it does turn out to be AC that purchases Chorus, then I wonder about Sky Regionals future

What would it be? I can only see AC buying both regionals and merging them...

[montado]

I don’t see it as AC. If it was AC it would not have been leaked as they would have had everything confidential until an announcement IMO. But that’s just purely speculation.

[rudder]

I don’t see it as AC. If it was AC it would not have been leaked as they would have had everything confidential until an announcement IMO. But that’s just purely speculation.

Nothing was leaked.

There was an intervention by the securities regulator about unusual trading activity. That forced CHR to disclose the unsolicited offer.

[montado]

Nothing was leaked but there was unusual trading activities? Sounds to me like some discussion left the boardroom.

When Transat and Air Canada negotiated there was no unusual activity leading up to the announcement. They were pretty tight lipped about the initial offer, and also the new latest offer, and trading was never halted due to unusual activity.

[Fanblade]

https://www.bnnbloomberg.ca/westjet-del ... -1.1512435

Any chance the WJ/Delta Joint venture and Chorus having an unsolicited offer are related?

[milhouse]

I don’t see it as AC. If it was AC it would not have been leaked as they would have had everything confidential until an announcement IMO. But that’s just purely speculation.

Nothing was leaked.

There was an intervention by the securities regulator about unusual trading activity. That forced CHR to disclose the unsolicited offer.

Unusual trading activity is what implies a leak.

[fish4life]

https://www.bnnbloomberg.ca/westjet-del ... -1.1512435

Any chance the WJ/Delta Joint venture and Chorus having an unsolicited offer are related?

It would be illogical to think that those companies would expect a competition bureau to be ok with that purchase.
Also I’d imagine there is “no-competition” clauses in the CPA with AC.

[rudder]

I don’t see it as AC. If it was AC it would not have been leaked as they would have had everything confidential until an announcement IMO. But that’s just purely speculation.

Nothing was leaked.

There was an intervention by the securities regulator about unusual trading activity. That forced CHR to disclose the unsolicited offer.

Unusual trading activity is what implies a leak.

No corporate executive is that stupid, or that careless, to share information externally or to act on non-public information.

More likely that the potential acquirer was taking up CHR shares. There was a 7% share price increase on the day in question prior to the ordered trading halt. Perhaps lots of buy orders placed?

A leak is a serious allegation. No doubt securities regulators will look at who was buying CHR shares that morning. But I doubt they will find evidence of a party to the non-public information acting on that information, other than the potential acquirer, which is legal.

[hithere]

AC already owns 10% of Chorus and Mr. Rousseau who currently sits on the Chorus Board of Directors and will be Rovinescu’s successor at AC when he retires in February. AC also did not try to settle the ACPA CPA scope grievance in the latest ACPA MOA and was content(it appeared) to allow it to go to arbitration. Seems to be a lot of things going on between AC and CHR for it to be anyone other than AC who is interested

[milhouse]

Nothing was leaked.

There was an intervention by the securities regulator about unusual trading activity. That forced CHR to disclose the unsolicited offer.

Unusual trading activity is what implies a leak.

No corporate executive is that stupid, or that careless, to share information externally or to act on non-public information.

There are plenty of corporate executives serving sentences for insider trading. Not saying that's the case here but insider trading is rampant, and unfortunately hard to prove.

[mbav8r]

The Company shall, in any future sale of a business or part thereof require as a condition of sale that the following be inserted into the Agreement of Sale:
a) A condition that the successor, in any proceedings before any court, board, or tribunal shall not take any position incompatible with the minimum rights and privileges set out in this section and shall make every effort to ensure such minimum rights and privileges are guaranteed.
b) That in the event of a seniority list integration pursuant to an intermingling of bargaining units following such a sale, the seniority numbers of all Pilots on the Pilot System Seniority list shall be fully integrated pursuant to ALPA Merger Policy. c) That every Pilot on the Pilot System Seniority List as of the date of sale shall be credited with seniority for all purposes with the successor

[Fanblade]

https://www.bnnbloomberg.ca/westjet-del ... -1.1512435

Any chance the WJ/Delta Joint venture and Chorus having an unsolicited offer are related?

It would be illogical to think that those companies would expect a competition bureau to be ok with that purchase.
Also I’d imagine there is “no-competition” clauses in the CPA with AC.

There is a no competition type clause in the CPA but I wasn’t talking about Jazz working for WJ or Delta. I’m thinking more along the lines of Onex looking to consolidate CPA providers under one holding company. ABC holdings would own Chorus and Encore. Both provide CPA services to their respective partners.

What would the valuation be on that holding company post pandemic?

I’m not even throwing out a guess. Just musing.

[Fanblade]

https://www.bnnbloomberg.ca/westjet-del ... -1.1512435

Any chance the WJ/Delta Joint venture and Chorus having an unsolicited offer are related?

It would be illogical to think that those companies would expect a competition bureau to be ok with that purchase.
Also I’d imagine there is “no-competition” clauses in the CPA with AC.

There is a no competition type clause in the CPA but I wasn’t talking about Jazz working for WJ or Delta. I’m thinking more along the lines of Onex looking to consolidate CPA providers under one holding company. ABC holdings would own Chorus and Encore. Both provide CPA services to their respective partners.

What would the valuation be on that holding company post pandemic?

I’m not even throwing out a guess. Just musing.

https://www.bnnbloomberg.ca/westjet-del ... -1.1512435

Any chance the WJ/Delta Joint venture and Chorus having an unsolicited offer are related?

It would be illogical to think that those companies would expect a competition bureau to be ok with that purchase.
Also I’d imagine there is “no-competition” clauses in the CPA with AC.

There is a no competition type clause in the CPA but I wasn’t talking about Jazz working for WJ or Delta. I’m thinking more along the lines of Onex looking to consolidate CPA providers under one holding company. ABC holdings would own Chorus and Encore. Both provide CPA services to their respective partners.

What would the valuation be on that holding company post pandemic?

I’m not even throwing out a guess. Just musing. I just think consolidating the regional industry under one roof has value.

More likely though it is these guys trying to consolidate more under their roof.

https://www.exchangeincomecorp.ca/

[KenoraPilot]

Onex and EIC have been making some large gains on stock lately. Onex has over 10Billion in liquid assets currently, not sure how liquid EIC is.

[rudder]

https://www.bnnbloomberg.ca/westjet-del ... -1.1512435

Any chance the WJ/Delta Joint venture and Chorus having an unsolicited offer are related?

It would be illogical to think that those companies would expect a competition bureau to be ok with that purchase.
Also I’d imagine there is “no-competition” clauses in the CPA with AC.

There is a no competition type clause in the CPA but I wasn’t talking about Jazz working for WJ or Delta. I’m thinking more along the lines of Onex looking to consolidate CPA providers under one holding company. ABC holdings would own Chorus and Encore. Both provide CPA services to their respective partners.

What would the valuation be on that holding company post pandemic?

I’m not even throwing out a guess. Just musing.

I just spent more time than I care to repeat on SEDAR looking at the CHR documents.

There is a redacted copy of the AC CPA as well as documents updating that CPA in 2015 and 2019.

The ‘change of control’ language does not allow for any acquirer that operates flights or sell tickets in/out of any of YUL/YYZ/YYC/YVR or an acquirer that controls an air operator that serves any of those hub cities.

Excerpt from the CPA:

“A prohibited Change of Control, as set forth above, shall constitute an Event of Default which shall entitle AC to terminate the CPA”.

Due to CHR BOD presence, Rousseau/AC would have known in the instant of an unsolicited offer from a third party.

[Fanblade]

It would be illogical to think that those companies would expect a competition bureau to be ok with that purchase.
Also I’d imagine there is “no-competition” clauses in the CPA with AC.

There is a no competition type clause in the CPA but I wasn’t talking about Jazz working for WJ or Delta. I’m thinking more along the lines of Onex looking to consolidate CPA providers under one holding company. ABC holdings would own Chorus and Encore. Both provide CPA services to their respective partners.

What would the valuation be on that holding company post pandemic?

I’m not even throwing out a guess. Just musing.

I just spent more time than I care to repeat on SEDAR looking at the CHR documents.

There is a redacted copy of the AC CPA as well as documents updating that CPA in 2015 and 2019.

The ‘change of control’ language does not allow for any acquirer that operates flights or sell tickets in/out of any of YUL/YYZ/YYC/YVR or an acquirer that controls an air operator that serves any of those hub cities.

Excerpt from the CPA:

“A prohibited Change of Control, as set forth above, shall constitute an Event of Default which shall entitle AC to terminate the CPA”.

Due to CHR BOD presence, Rousseau/AC would have known in the instant of an unsolicited offer from a third party.

Perhaps why the “number of significant conditions” comment? It looks like any company currently involved in aviation in Canada would be considered a prohibited change of control.

IOW words AC has the final thumb up or down. I have to conclude then that whatever this proposal is, the people making the sales pitch think AC might be interested. Otherwise it’s pointless.

[Loon-A-Tic]

So AC hands over a "gutted" Jazz minus a recently signed, crippling long term CPA agreement and SKV becomes AC sole CPA holder and regional carrier on a lower cost operating structure.

[mbav8r]

So AC hands over a "gutted" Jazz minus a recently signed, crippling long term CPA agreement and SKV becomes AC sole CPA holder and regional carrier on a lower cost operating structure.

Who, in their right mind would buy a company without a long term contract?

[rudder]

IOW words AC has the final thumb up or down. I have to conclude then that whatever this proposal is, the people making the sales pitch think AC might be interested. Otherwise it’s pointless.

AC paid $97MM for a 10% stake in CHR. Prior to the price run up on Friday, that investment was worth $24MM. It is now worth $31MM. AC is still underwater on that investment and will still be even with a third party offer to take up the AC held CHR shares at a premium over the 50 day price average.

AC cannot block a third party offer from a non-industry player. However, my guess is AC wanted a presence on the CHR BOD for a reason. If CHR is taken private, that presence will end.

There may be an auction scenario developing.

[timeflies]

AC already owns 10% of Chorus and Mr. Rousseau who currently sits on the Chorus Board of Directors and will be Rovinescu’s successor at AC when he retires in February. AC also did not try to settle the ACPA CPA scope grievance in the latest ACPA MOA and was content(it appeared) to allow it to go to arbitration. Seems to be a lot of things going on between AC and CHR for it to be anyone other than AC who is interested

what you are saying makes sense.

Air Canada buying Chorus, so the ACPA will stop making noise when the company gives more flying to Jazz because they will technically become AC pilots ?

interesting times for sure.