Second bidder for Air Transat says it is withdrawing $14 per share offer

Group Mach says it is withdrawing its bid for Transat A.T., stating the tour operator chose to ignore its proposal even though it featured a higher price than Air Canada's offer.

Alfred Bugge, head of mergers and acquisitions at Group Mach, says Transat was well aware of the Quebec developer's $14-per-share proposal last week but forged ahead with an Air Canada takeover agreement priced at $13 per share.

Under the definitive agreement, Transat shareholders will convene by Aug. 26 to vote on the Air Canada deal, valued at $520 million. Until then Transat can accept competing offers that would have to be at least $14 per share on top of a $15-million break fee for Air Canada, which could opt to match the superior bid.

The current deal faces legal and regulatory scrutiny along with resistance from Transat shareholders Letko, Brosseau and Associates and PenderFund Capital Management, which jointly own a 22.06 per cent stake.

Transat and Air Canada announced the transaction last Thursday, which will preserve the Transat and Air Transat brands and keep the head office and key functions in Montreal.

Transat declined to comment on whether the tour operator has received other proposals since last week.