Advisory firm recommends Transat shareholders vote for the proposal with Air Canada

Transat A.T. Inc. announced that Institutional Shareholder Services Inc. (“ISS”) has recommended that Transat Shareholders vote for the plan of arrangement between Transat and Air Canada.

The value of the all-cash transaction is approximately $720 million. John Chung Photo
The value of the all-cash transaction is approximately $720 million. John Chung Photo
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This favourable recommendation of ISS was first published on Aug. 11, 2019, based on the original price of $13 per share that was reflected in the pre-amended binding arrangement agreement by which Air Canada was to acquire all outstanding shares of Transat. ISS reiterated its recommendation that Transat shareholders vote for the arrangement in a subsequent alert after the price per share payable by Air Canada was increased to $18 under an amendment dated Aug. 11, 2019.

Favourable ISS Recommendation

ISS is a leading independent, third-party, proxy advisory firm which, among other services, provides proxy voting recommendations to pension funds, investment managers, mutual funds and other institutional shareholders.

In reaching its conclusion, ISS noted:

“The acquisition by Air Canada is supported given the significant premium and certainty of the all-cash consideration; the execution risks associated with other alternatives, including the status quo; and the sale process conducted by the board, which appears to have provided alternative bidders ample opportunity to submit superior offers.”

Arrangement Agreement with Air Canada

Under the terms of the binding arrangement agreement entered into by the corporation and Air Canada on June 27, 2019, amended on Aug. 11, 2019, and unanimously approved by the board of directors of Transat, Air Canada will acquire all outstanding shares of Transat for $18 per share. The value of the all-cash transaction is approximately $720 million.

Special Meeting of Transat Shareholders

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In accordance with the terms of an interim order of the Québec Superior Court obtained on July 17, 2019, Transat shareholders will be asked to consider and vote on a special resolution approving the arrangement. A special meeting of Transat shareholders will be held at 10:00 am on Friday, Aug. 23, 2019 at the Sofitel Montreal Hotel located at 1155 Sherbrooke Street West, Montréal, Que.

Transat’s board and the special committee of the board, supported by their financial and legal advisors, reiterate their unanimous recommendation that the arrangement with Air Canada is in the best interest of Transat and its stakeholders and is fair to Transat shareholders, and unanimously recommend that shareholders vote for the special resolution approving the arrangement with Air Canada.

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