Transat has sent out an update on its discussions with Pierre Karl Peladeau, in the wake of Peladeau’s comments yesterday that he’s no longer interested in buying the company

MONTREAL — Transat has sent out an update on its discussions with Pierre Karl Peladeau, in the wake of Peladeau’s comments yesterday that he’s no longer interested in buying the company.

Peladeau has been pursuing Transat for months, and that ramped up after Air Canada’s acquisition proposal for the company fell through. The announcement that Air Canada and Transat had walked away from their deal came April 2 after indications from the European Commission that a decision on the proposal, even if it was affirmative, could still be months away.

Days later, on April 7, Peladeau delivered to Transat a non-binding proposal for the acquisition of all Transat shares through his holding company Gestion MTRHP Inc. The proposed price was $5 per share, payable in cash.

“Although this proposal required a response within two days, the parties have from that date and until May 13 continued their discussions on the basis of this proposal and it has been thoroughly reviewed by the special committee of independent directors responsible for evaluating any proposal to acquire the Transat shares with the assistance of financial and legal advisors,” said Transat in its statement today.

Transat added that it had “taken note of Mr. Peladeau’s public statements of yesterday but has not received any formal communication on this matter.”

In a report by Quebec’s Journal de Montreal, and picked up by the Globe and Mail, Peladeau is quoted as saying: “I’m no longer interested. If I make a new offer, I know it’s not going [to] get through. What’s the point of making one when you know the biggest shareholder is going to refuse?”

According to reports, Transat’s largest shareholder, Letko Brossard and Associates, believes the $5 per share offer is too low.

After several twists and turns the price tag for the Air Canada deal had also landed at $5 per share, for a proposed purchase price of $190 million, as announced in fall 2020. Back in June 2019 Air Canada offered $520 million, later upped to $720 million.

On April 29 Transat announced its financing deal from the federal government, allowing Tranat to borrow up to $700 million in additional liquidity through the Large Employer Emergency Financing Facility (LEEFF). This additional liquidity “allows the company to plan for the resumption of its operations and the implementation of its strategic plan for the coming years,” said Transat in its statement today.

Transat said this week that it has extended its suspension of operations until July 29, 2021.