Tour Operators

Transat gets exemption from take-over bid requirements

AT_HQ-Jan24

Transat A.T. Inc. reports that pursuant to an application it filed with the Autorité des marchés financiers, as principal regulator, the Ontario Securities Commission and the securities regulatory authorities in the other provinces of Canada, the company received, on Dec. 18 a conditional exemption from applicable take-over bid and related early warning reporting requirements.

This decision effectively treats Transat’s Class A variable voting and Class B voting shares as a single class for the purposes of applicable take-over bid requirements and early warning reporting requirements contained under Canadian securities laws. A copy of the decision is available on SEDAR at http://www.sedar.com .

The exemption is conditional to shareholder approval of the renewal of Transat’s shareholder rights plan, including the proposed amendments resulting from the decision (the “2014 Rights Plan”), which approval Transat will seek at its annual and special meeting of shareholders to be held on March 13.

Subject to certain exceptions, the shareholder rights plan currently in place would be triggered in the event of an offer to acquire 20% or more (on a per class basis) of the outstanding Class A Variable Voting Shares or Class B Voting Shares. The 2014 Rights Plan will, to be consistent with the Decision, only be triggered by an offer to acquire 20% or more of the outstanding Class A Variable Voting Shares and Class B Voting Shares of Transat on a combined basis.

Transat has a flexible capital structure that is designed to permit non-Canadian (as defined under the Canada Transportation Act) investors to become shareholders of Transat. The relatively small number of outstanding Class A Variable Voting Shares (the share class for non-Canadians) may limit the ability of non-Canadians to acquired shares of Transat. In an effort to facilitate the acquisition of Class A Variable Voting Shares, Transat applied to the Autorité des marchés financiers, as principal regulator, and the Ontario Securities Commission in order to seek the decision.

Though applicable take-over bid rules and early warning requirements apply to the acquisition of securities of a class, it was acknowledged in the decision that aggregating Class A Variable Voting Shares and Class B Voting Shares for the purpose of the take-over bid rules and early warning requirements may facilitate the acquisition of Class A Variable Voting Shares. Because of the relatively small public float of Class A Variable Voting Shares (compared to the public float of Class B Voting Shares), absent the decision, it may be more difficult for non-Canadians to acquire shares in the ordinary course without the apprehension of inadvertently triggering the take-overs rules or early warning requirements.

(http://www.transat.com)