AC and TRZ Agree to Terminate Arrangement

[iflyroads]

https://ca.finance.yahoo.com/news/eu-re ... rc=applewf

If somehow the deal doesn't expire on September 27th

That's the important question right now. A clause bought up a few posts ago, Transat maybe able to extend the deal beyond Sept 27th because of the EU probe (Again, I am no expert).

May make the difference between killing the deal in 26 days, or dragging it on for another few months. We have also yet to hear from the TC minister about his decision.

[TheStig]

Looks like the deadline has been moved back to Dec 11th.

https://www.reuters.com/article/us-tran ... SKBN25S53S

[FL320]

So AC recently sent the missing documents to the EU commission, doesn’t look like they want to kill the process after all. But who wouldn’t be interested in buying the competition for 150 millions only instead of 720? Thanks to the new loan (approved by AC) AT can sustain 2 more years at the current expense rate, and it will benefit AC anyway.

[Fanblade]

So AC recently sent the missing documents to the EU commission, doesn’t look like they want to kill the process after all. But who wouldn’t be interested in buying the competition for 150 millions only instead of 720? Thanks to the new loan (approved by AC) AT can sustain 2 more years at the current expense rate, and it will benefit AC anyway.

I don’t think there is any doubt the current deal will either be renegotiated or expire.

If allowed to expire the “then what” question is anyone’s guess. Does AC walk away? Does AC attempt a redo on the deal? Trying to deduce what they are planning based on current choices is impossible as their fiduciary duty to shareholders and the current deal is legally binding. Legally binding that is until it expires.

Only when the deal expires can the parties be expected to act and talk freely about the future of the deal. Until then everything else is pure speculation.

My personal guess. I stress the word guess. If the parties are still interested in the deal it will be renegotiated before it expires. If the deal is permitted to simply expire it probably means the deal is off. My guess is the deal simply expires.

[planebored]

Anyone who thinks this deal is still happening in it's current form, perhaps even at all... is living in a fantasy land.

[Cappo1]

Anyone who thinks this deal is still happening in it's current form, perhaps even at all... is living in a fantasy land.

For sure . No deal. It was a fantastic concept pre pandemic . Bad timing.

[Cappo1]

So AC recently sent the missing documents to the EU commission, doesn’t look like they want to kill the process after all. But who wouldn’t be interested in buying the competition for 150 millions only instead of 720? Thanks to the new loan (approved by AC) AT can sustain 2 more years at the current expense rate, and it will benefit AC

Hey Dr. Faucci . AC is playing the game. We only want your hulls.

[rudder]

This pretty well sums up where the transaction is right now.

Excerpt from TRZ Q3 results press release:

“While the Corporation remains firmly committed to completing the transaction with Air Canada, certain factors beyond its control and related to the COVID-19 pandemic could influence the outcome of the proposed arrangement. The market conditions of the global industry have been completely transformed. Among other things, the vast majority of North American, European and international air carriers have requested financial assistance measures, but have had to implement reductions in capacity (as the Corporation did). This context could impact the obtaining of approvals from regulatory authorities, especially regarding the appropriate package of remedies aimed at obtaining those approvals.

Moreover, owing to the pandemic and the continued restrictions on non-essential travel, the Corporation is actively looking to obtain additional sources of financing. The covenants undertaken under the arrangement agreement with Air Canada restrict and govern the Corporation's capacity to obtain additional sources of financing and may require Air Canada's prior consent. Although the agreement provides that Air Canada's consent may not be unreasonably withheld, there is no certainty that Air Canada will consent to the obtaining of additional sources of financing by the Corporation.

If the required approvals are obtained and the conditions are met, it is now expected that the arrangement will be completed during the fourth quarter of the 2020 calendar year. Under the arrangement agreement, the deadline for obtaining the regulatory approvals cannot be extended beyond December 27, 2020. This date, initially set for June 27, 2020, may be deferred, to the extent that the regulatory approvals are not obtained, for three one-month periods upon notification by one of the parties, and subsequently for three additional one-month periods under certain conditions. The Corporation has successively informed Air Canada of its decision to activate the first three initial one-month periods, which defers, for now, the June 27 deadline to September 27, 2020.”

[iflyroads]

https://www.bnnbloomberg.ca/transat-sha ... -1.1497807

Stock price below $4 yesterday.

Outside date on Transat investor relations website shows Sept 27th.

As far as I know AC has not used a 30 day extension nor is it planning to.

Now we wait to see if Transat can extend all the way till December based on the EU probe and missing documents. Its not over till it's over. This is 2020, anything can happen.

[altiplano]

8 year low?

Isn't it just because the whole market is down?

[Thorjones]

Today is the outside date deadline. Nothing in the news Friday about an extension.

Maybe tomorrow when the markets open?

[rudder]

Whatever the parties have to say on the extension - either separately or jointly - will likely be on the newswire tomorrow.

[FL320]

It would be great that AC confirm their intention once for all; so everyone could move on. Why wait if they don’t want it anymore?

[rudder]

It would be great that AC confirm their intention once for all; so everyone could move on. Why wait if they don’t want it anymore?

Up until today, AC has had no choice but to say (publicly) that the deal is still live. To have done otherwise would potentially have put them in breach of the agreement with financial liability.

Sept 28 is the first opportunity since signing that AC can publicly take a different position.

[Fanblade]

It would be great that AC confirm their intention once for all; so everyone could move on. Why wait if they don’t want it anymore?

A contract? Getting sued for not fulfilling their obligations?

AC doesn’t have the $ to make this work anymore. They will run out the clock. I’m just not completely certain the clock ran out yesterday. If Transat still has the ability to extend then AC will just stay silent or vague.

If the clock ran out yesterday then parties will speak freely Monday.

Edited:

Rudder beat me to it.

[JoeyBarton]

It would be great that AC confirm their intention once for all; so everyone could move on. Why wait if they don’t want it anymore?

So you are now convinced this deal will not go through and ready to move on yourself? Up until now it seems you were pretty certain it would happen. Worried about the stock being below 4$?

[The Raven]

If the deal is still ‘live’, which I suspect it’s not, it won’t be for $18/share.

[FL320]

It would be great that AC confirm their intention once for all; so everyone could move on. Why wait if they don’t want it anymore?

So you are now convinced this deal will not go through and ready to move on yourself? Up until now it seems you were pretty certain it would happen. Worried about the stock being below 4$?

I am convinced it will go through but at a renegotiated price. 4$ is a pretty good deal for any investor and AC won’t let it go into other hands for sure. I am not worried by the stock at all; it won’t change my lifestyle

[TFTMB heavy]

If the deal is still ‘live’, which I suspect it’s not, it won’t be for $18/share.

Can you point to what article in the arrangement agreement that would allow a reduction in the share price?

[Fanblade]

I think he is inferring what I did further up the thread. Just because the current deal expires does not mean a new deal won’t be struck.

Short term I think the parties will say not now. Medium term, if it made sense before it probably will again.

[TFTMB heavy]

I think he is inferring what I did further up the thread. Just because the current deal expires does not mean a new deal won’t be struck.

Short term I think the parties will say not now. Medium term, if it made sense before it probably will again.

If the deal expires we can expect a lower price should both parties decide to revisit it, that being said TS will entertain all buyers at that point. Now, from what I understand of the current agreement the price is set, a deal has been made with the shareholders for $18/share. TS has an obligation towards its shareholders, I don't see why they or how they can say "not now" as you put it.

[iflyroads]

Pretty anticlimactic.

Do they have to make an announcement today?

[Fanblade]

I think he is inferring what I did further up the thread. Just because the current deal expires does not mean a new deal won’t be struck.

Short term I think the parties will say not now. Medium term, if it made sense before it probably will again.

If the deal expires we can expect a lower price should both parties decide to revisit it......I don't see why they or how they can say "not now" as you put it.

If the deal expires, the parties may state they want to revisit the merger, at a later date. That is all I was stating.

Assuming the deal actually expired on the 27th, the silence so far is interesting. If the parties want to salvage, change or alter the deal without completely walking away, the first opportunity for that to happen is right now.

Im not calling the deal expired until the parties say so.

[Fanblade]

The silence only tells me they are negotiating something.

[Jean-Luc Monette]

Transport Canada’s report is still on Minister Garneau’s desk, and the EU Competition Board (or whatever name...) are still evaluating the dossier.

How can the offer not be extended?