(Adds context, analyst comment)
MONTREAL, Dec 15 (Reuters) - Transat A.T. Inc TRZ.TO shareholders on Tuesday approved a discounted buyout offer from Air Canada AC.TO , a spokesman for the Montreal-based tour operator said, sending Transat shares up more than 10% in morning trade.
In October, Air Canada slashed its offer to buy Transat by almost 75%, lowering the deal to about C$188.7 million ($148.17 million), down from C$720 million, as COVID-19 weighed on travel demand. country's largest carrier had secured Transat shareholders' approval for the original deal last year to bolster its then-thriving leisure business.
But with the pandemic grounding flights globally, Air Canada faced shareholder pressure to renegotiate the deal, which is still pending approval from European and Canadian regulators. largest shareholder in both companies in October called Air Canada's revised offer "a very reasonable one," noting that the purchase price could be paid to Transat shareholders in cash or shares of Air Canada. on Tuesday, Transat said it had received an unsolicited proposal for the company from a private investor in late November, but the company's board did not deem it superior to the Air Canada offer.
While Transat shareholders were expected to vote in favor of the deal with Air Canada, "the key milestone" remains the European regulatory decision deadline of Feb. 9, Desjardins analyst Benoit Poirier said in a note to clients.
Transat shares rose 10.59% to C$5.85 a share in morning trade, while Air Canada stock was down 1.23% to C$25.78 a share.
($1 = 1.2735 Canadian dollars)