Canadian businessman seeks talks with Transat after deal with Air Canada left in limbo

By Allison Lampert

(Reuters) - Canadian businessman Pierre Karl Péladeau said on Tuesday night he wants to start talks to acquire Transat A.T., after Air Canada's planned C$188.7 million ($148.7 million) takeover of the Montreal-based tour operator was left in limbo.

Air Canada will not extend Monday's deadline for its acquisition of the company, after European regulators failed to give their approval, Transat said earlier on Tuesday.

Air Canada and Transat are still discussing potential amendments, and the agreement remains until either party ends it.

Noting that the operator of Air Transat could start negotiations with a new buyer, Péladeau said in a statement he would "like to start discussions" with management to allow the business to escape its "grave state of uncertainty."

Péladeau, chief executive of Québecor Inc , previously attempted to acquire Transat in his personal capacity as a businessman.

"I have certain concerns," Quebec Premier Francois Legault, who co-founded Transat in 1986, told reporters on Tuesday night, adding that the province was looking at different scenarios for Transat, with or without Air Canada, the country’s largest carrier.

Air Canada, also headquartered in Montreal, initially reached a deal before the COVID-19 pandemic to buy Transat, in a move to bolster its then-thriving leisure business. It later steeply discounted the offer.

The Canadian government has already approved the deal https://reut.rs/3s46Ztj, subject to conditions.

But the European Commission, which has requested additional information from the companies, is expected to arrive at a decision only in the first half of 2021, Transat said.

"We anticipate that other interested parties will step up and show their interest in Transat," Desjardins analyst Benoit Poirier said in a note to clients.

Onex Corp, which acquired Canada's WestJet in 2019, "could be another suitable contender," Poirier said.

Air Canada said earlier in the day it had no update to provide, while Onex was not available.

Transat shares closed down almost 8%, while Air Canada shares rose almost 5% in Toronto trading.

($1 = 1.2687 Canadian dollars)

(Reporting by Shreyasee Raj in Bengaluru and Allison Lampert in Montreal; Editing by Bernadette Baum and Peter Cooney)