Airbus A330-300 painted in the new Air Canada livery. | Photo: © Air Canada

LONDON –  Air Transat (TS) has announced that Institutional Shareholder Services (ISS) and Glass, Lewis & Co. have recommended TS Shareholders to vote for the revised acquisition of Air Canada (AC). In addition, the board of directors at TS unanimously reconfirmed their support for the acquisition transaction with AC.

ISS and Glass Lewis are leading independent, third-party, proxy advisory firms which, among other services, provide proxy voting recommendations to pension funds, investment managers, mutual funds and other institutional shareholders.

Air Canada Boeing 777-300ER C-FKAU Taking off from Rome Fiumcino Intl’ Airport (FCO). Photo: Andrea Ongaro – @alphaoscaraviation

Arrangement Agreement with Air Canada


According to the company, under the terms of the binding arrangement agreement entered into by the Corporation and AC dated October 9, 2020, and unanimously approved by the Board, AC will acquire all issued and outstanding shares of TS for US$5 per share, payable at holders’ option either in cash or shares of AC, or a combination thereof.

Air Canada shares issuable under the share exchange option will be issued at a fixed price of US$17.47 per AC share, representing a fixed exchange ratio of US$0.2862 AC share per TS share.

For illustrative purposes only, on December 4, 2020, the closing price of the AC shares on the Toronto Stock Exchange was US$27.50. Based on that closing price, the implied purchase price for TS would be US$7.87 per share for shareholders selecting the share exchange option.

Photo: AirTransat

Special Meeting of Transat Shareholders


In accordance with the terms of an interim order of the Québec Superior Court obtained on November 10, 2020, TS Shareholders will be asked to consider and vote on a special resolution approving the revised Arrangement.

A special meeting of TS shareholders will be held at 10:00 am on Tuesday, December 15, 2020, in a virtual-only format.

Airbus A321 Air Transat, Toronto Lester B. Pearson International Airport, YYY. Photo: Andrew Cline, Andy Cline

Statement from ISS and Glass Lewis


ISS said, “The rationale behind the revised agreement appears sound. Shareholders can elect to receive the consideration entirely or partly in cash, by electing to receive the cash consideration it would provide shareholders with certainty of value and immediate liquidity.”

“Shareholders can also elect to receive the consideration entirely or partly in AC shares. This share payment alternative provides shareholders the opportunity to participate in the potential long-term value and upside that could be created by AC.”

“The revised arrangement also gives the company the ability to respond to superior proposals. In light of the above reasons, the favourable market reaction and the absence of significant governance concerns, shareholder approval of this resolution is warranted.”

Glass Lewis concluded, “Considered in the aggregate, then, while we continue to recognize the substantial reduction in value implied by the revised terms, we believe the sum of available information suggests TS investors would be best served supporting the AC transaction at this time.”


Featured image: Airbus A330-300 painted in the new Air Canada livery. | Photo: © Air Canada