Air Canada says it will go ahead with its plan to buy smaller rival Air Transat, but it will pay more than 70 per cent less than it first agreed to.
The two companies said in a release over the weekend that Air Canada will buy all outstanding shares in Transat for $5 a piece, for a total purchase price of $180 million.
That’s a far cry from the $18 per share that Air Canada agreed to pay in late 2019, which was at the time the culmination of a lengthy bidding process for the smaller travel company.
But that was before the COVID-19 pandemic walloped demand for air travel, sending valuations for airlines plummeting.
“COVID-19 has had a devastating effect on the global airline industry, with a material impact on the value of airlines and aviation assets,” Air Canada CEO Calin Rovinescu said.
“Nonetheless, Air Canada intends to complete its acquisition of Transat, at a reduced price and on modified terms.”
The press release made no mention as to whether or not the new purchase price is acceptable to some major Transat shareholders, including the Quebec pension plan known as The Caisse, and money managers Letko, Brosseau and Associates, which owns about one fifth of Transat’s shares.
Those investors were believed to have been a major roadblock to the original plan, until Air Canada upped their offer to make it worth their while.
Requests for comment to those stakeholders as to whether or not they support the new plan were not immediately returned.
Shares move higher on news
The reassurance from Air Canada gave some support to Transat shares, which have been selling off sharply on fears that the takeover would be scrapped entirely.
Anlayst Tim James at TD Bank says Air Canada must have been losing the motivation to go through with the deal, until Transat agreed to the lower price.
“We believe that the size of the price revision indicates that Transat could be in a weaker financial condition than anticipated, or that Air Canada was content to let the deal expire, or a combination of both, leading to a willingness by Transat to accept such a large price adjustment,” he said.
But Krista Friesen, Jessica Zhang and Kevin Chiang with CIBC said at the new price, the deal could turn out to be a win for both sides.
“We do see an opportunity for Air Canada to come out of this in a stronger position given its leading market share, the strength of its balance sheet heading into this crisis, its cost-cutting initiatives and its operational adjustments,” they said.
“All these factors should allow it to recover faster than its domestic peers. As such, having the option to convert their [Transat] share for AC shares should be viewed positively by [Transat] shareholders looking to partake in the airline recovery.”
Transat shares gained almost $1 on the TSX to change hands at $4.77. Last summer, they traded above $16 a share.
Despite the assurances from the two companies, the deal is still far from certain.
Shareholders, courts, stock exchanges and regulatory bodies including Canada’s Competition Bureau — which has already warned it thinks the deal could be bad for consumers — must still give their OK.
If all those approvals are met, Air Canada said it expects the deal to be finalized in January or February.
More Manitoba healthcare workers test positive for COVID-19: provincial data – CTV News Winnipeg
The number of healthcare workers in Manitoba who have tested positive for COVID-19 continues to grow, according to the latest surveillance data released by the Manitoba government.
In its weekly report released Monday, the province said 16 more healthcare workers were diagnosed with COVID-19 during the week of Oct. 4-10, bringing the total to 129 since the pandemic began in March.
Of the healthcare workers who contracted COVID-19, 39 worked as healthcare aides, while 32 worked as nurses, and 12 worked as social or support workers.
Of the 116 cases of COVID-19 among healthcare workers, the province said 95 have recovered as of Oct. 10. The surveillance report said 62.3 per cent of the cases were from close contact with a known COVID-19 case, with 28.7 per cent of cases coming from an unknown source. The remaining nine per cent of cases come from travel.
CASE DATA IN MANITOBA
During the week of Oct. 4-10, Manitoba reported a total of 502 COVID-19 cases, with 75 per cent of the new cases reported in Winnipeg. In the remaining health regions, 12 per cent of the cases were in the Interlake-Eastern region, eight per cent were in Southern Health, three per cent in the Prairie Mountain Health Region, and one per cent in the Northern Health Region.
During the week, Manitoba performed an average of 2,419 tests per day, and the test positivity rate was 3.4 per cent, up from 2.3 per cent the week before.
Of the cases this week where information on the infection’s source was available, 53.7 per cent were from close contact to known cases, 20.4 per cent are still pending results, and 17.2 per cent of cases were from an unknown source. The remaining percentage (8.7) was from travel.
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The Canadian Press
THOUSAND OAKS, Calif. — The Los Angeles Rams have signed veteran kicker Kai Forbath from the Chicago Bears’ practice squad after a rocky start to the season for rookie Samuel Sloman.The Rams kept Sloman on their active roster Tuesday. They also placed linebacker Ogbonnia Okoronkwo on injured reserve.Los Angeles drafted Sloman in the seventh round out of Miami of Ohio, but he has missed three of his 18 extra-point attempts this season, including a blocked try against the San Francisco 49ers last Sunday night in the Rams’ 24-16 loss. Only Kansas City’s Harrison Butker has missed more extra points this season.Sloman also has missed two of his nine field-goal attempts, including a 29-yarder in the season opener, and coach Sean McVay hasn’t always been happy with his kickoffs.Forbath is a Los Angeles-area native who played at Sherman Oaks Notre Dame High School and UCLA. He kicked for six teams in his first eight seasons in the NFL.He spent his first three seasons with Washington before moving to New Orleans, Minnesota, Jacksonville, New England and finally Dallas, where he made all 10 of his field-goal attempts last season. Forbath still lost his job in the off-season to longtime Rams kicker Greg Zuerlein.Forbath has spent time this season on the practice squads of Carolina and Chicago.Zuerlein left the Rams after eight seasons to sign with the Cowboys along with John Fassel, the Rams’ former interim head coach and their longtime special teams co-ordinator. Zuerlein joined the Rams in St. Louis and was among the NFL’s elite kickers after the franchise returned home to Los Angeles, although his effectiveness declined slightly last year.Okoronkwo, a backup linebacker with eight tackles and one sack this season, has an elbow injury that requires surgery. He is likely to be sidelined for at least four weeks.___More AP NFL: https://apnews.com/NFL and https://twitter.com/AP_NFLGreg Beacham, The Associated Press
Winnipeg beverage rooms allowed to stay open as province reconsiders restrictions – Global News
The province of Manitoba has done a 180 on restrictions in Winnipeg that were just hours old, allowing business operating under the “beverage room” licence to remain open for the following two weeks.
Beverage rooms are classified as food and beverage establishments connected to hotels.
The increased measures brought to Winnipeg on Monday morning originally called for all beverage rooms and “entertainment facilities” such as casinos and bingo halls to shut down for two weeks as COVID-19 cases in Manitoba’s capital continued a sharp climb.
“Following further review, facilities licensed as beverage rooms under the Liquor, Gaming and Cannabis Control Act have not been closed under the order. All other requirements for licensed premises will still apply,” the province said in a news release on Monday night.
Manitoba Hotel Association president Scott Jocelyn tells 680 CJOB it’s a wrong righted by the province, but it’s only a small victory for his members.
“We still have to go back to ‘orange-level’ restrictions, but it at least gives our people a glimmer of hope to try and carve out an existence.”
Under the orange level on the pandemic response system, all food and beverage establishments must operate at 50 per cent capacity or less, stop service at 10 p.m., and have all patrons out of their establishment by 11 p.m.
Additional restrictions for beverage rooms include sound restricted to 80 decibels, as well as dancing, pool and darts banned.
“So much of what we do is impacted,” Jocelyn explains. “Other businesses can start to get their feet back under them, but they’re not dealing with face-to-face interaction like we do.”
“When the government has protocols limiting travel, that doesn’t put people in our guest rooms. When we can’t have events, we can’t use those spaces. It’s body blow after body blow.”
Jocelyn is still looking to the government to provide sector-specific financial support so his members can feel more confident they’ll make it through the end of the pandemic.
“You can’t treat us like everyone else. We’re different, and it’s going to take [hotels] longer to recover than most other sectors. We’re going to need help.”
As for reaction from his members, Jocelyn says it’s a mixed bag.
“It’s a small victory today. We’re nowhere near home, but it’s important the government corrected where they were going. They gave us a glimmer of hope and we’ll keep pushing on the help we need.”
The new orders go into effect at 10 p.m. Monday and will remain until at least 11 p.m. on Nov. 2.
Winnipeg business community pleads for sector-specific support as new restrictions take hold
© 2020 Global News, a division of Corus Entertainment Inc.
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