Air Canada (TSE:AC) will spend an additional C$200 million to buy Transat A.T. (TSE:TRZ) to win the support of the Canadian tour company's largest shareholder. (A Canadian dollar is worth US$0.76.)
Air Canada announced on August 11 that Transat shareholder Letko Brosseau and Associates backed the revised C$720 million deal, which raises the purchase price from C$13 to C$18 per share.
"After extensive consultations with Letko Brosseau and several other large shareholders of Transat, we agreed to materially increase our price to ensure the transaction receives the necessary level of support at the Special Meeting of Shareholders of Transat," Air Canada CEO Calin Rovinescu said in a statement.
Toronto-based Letko Brosseau and Associates owns 19 percent of Transat.
Air Canada revised its offer following an effort by a Quebec-based real estate firm to thwart the acquisition. Mach Group had offered C$14 per share, but a Quebec securities regulator blocked it on August 12.
Transat shares soared by as much as 40 percent during morning trading.
Air Canada and Transat announced the deal in June.
Transat's airline primarily ferries passengers in packaged vacations. It also offers cargo services, which accounted for a portion of C$135 million of "other" revenue in Transat's 2018 results.
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