Air Canada is giving Canadian Airlines' shareholders until 7 December to accept its C$2-per-share bid for its major rival, after mailing the formal offer to the shareholders.
The Montreal-based carrier has set up a new company to make the offer. Although the offer is to be funded by Air Canada, the new company would not become a subsidiary of Air Canada prior to completing a debt restructuring of Canadian Airlines - assuming that its offer is accepted by Canadian's shareholders.
Air Canada says that if its offer is successful it will "liberate under-performing assets that will be deployed to profitable new flying for the benefit of Air Canada's shareholders."
It adds that it plans to introduce new domestic routes, additional cross-border services to the USA and "use dormant route authorities to launch new service to major international destinations."
The offer for Canadian is worth about C$92 million, which Air Canada says is a premium of about 24% on the closing price of Canadian's shares on 12 November.
Source: Flight Daily News
