Transat A.T. Inc. is filing a complaint against Groupe Mach with Quebec’s Tribunal administratif des marchés financiers, following an offer by the real estate developer to acquire 6.9 million Class B voting shares of the tour operator in what Transat alleges is a bid to block its purchase by Air Canada.
In a statement regarding the complaint, Transat's board of directors and the special committee of the Board, supported by their financial and legal advisors, continue to “unanimously reiterate that the arrangement with Air Canada is in the best interest of Transat and its stakeholders,” advising shareholders to vote in favour of the Air Canada purchase and to reject Groupe Mach’s offer.
The statement also describes Groupe Mach’s offer to shareholders as “highly abusive, coercive, misleading and conditional,” adding that Transat “is reviewing other potential legal proceedings with the goal of protecting shareholders from the Scheme and defending their interests, and the integrity of capital markets.”
“Transat remains adamant that Mach has made a misleading promise of a better deal and engages in coercive and unfair shareholder treatment,” read the statement in part. “Mach's Scheme is not a better deal for all the shares of Transat, but a partial bid on a limited number of shares representing 19.5 per cent of the outstanding Class B Shares, and therefore does not provide liquidity to all shareholders of Transat.
“Contrary to its claims that it is seeking to protect Transat's shareholders, Mach's scheme is highly prejudicial to their interests and coercive…. It is designed to create uncertainty to entice shareholders to act quickly and contrary to their own interests. The Scheme is limited to the holders of Class B Shares as of July 17, 2019, the record date set by Transat to determine the shareholders entitled to vote on the Air Canada Arrangement, thus excluding all Class B Shares acquired after such date.
“The bid also excludes all Class A variable voting shares, thereby frustrating the principle that such shares be treated on equal footing with the Class B Shares.”
The story so far
The latest offer by the real estate group was made Aug. 2 (valid until Aug. 13 at 5 p.m.), after a formal bid to purchase Transat (made on June 14) was turned down.
In a statement made by Groupe Mach on Aug. 2, the company said:
"The proposed acquisition by Air Canada under the proposed arrangement significantly underestimates Transat.... The sales process undertaken by Transat's Board of Directors is defective in several respects, particularly with respect to the failure of Transat's Board to respond to Group Mach Inc. or to discuss with it its superior proposal, dated June 25, 2019 at a price of $14.00 cash per voting share."
In interview with La Presse Canadienne, Vincent Chiara, president of Groupe Mach, acknowledged that he had had discussions with other major shareholders at Transat AT. However, he wouldn’t say who.
This is a developing story.
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