Transat shares drop 22% after failed Air Canada takeover
Transat AT shares fell 22.6% on the first day of trading after Air Canada ended its takeover of the Montreal-based tour operator amid Europe’s reluctance to approve the deal.
Transat shares fell to a low of $ 4.25 and were down $ 1.02 or 18.6% to $ 4.47 at the start of Monday’s trading.
Air Canada shares gained 58 cents or 2.2% to $ 27.03 on the Toronto Stock Exchange.
Canada’s largest airline announced on Good Friday that its $ 190 million purchase of Transat was dead.
Walter Spracklin of RBC Dominion Securities says that while he expected Air Canada to make changes to get the required approvals from the European Commission, he didn’t believe it was in the airline’s best interests. to propose a “set of unprofitable solutions that could compromise its future ability to be competitive internationally.” “
He adds that the termination fee of $ 12.5 million was not significant, representing less than 1% of its estimated cash consumption of $ 3.8 billion for 2021.