Blake's Conference by Me Paul Martel: The Transat Case

The Event

On September 11th, 2019, Blakes hosted one of its well-known monthly conferences by Me Paul Martel on recent jurisprudence in business law. Among other cases, Me Martel, along with a partner at Blakes, discussed highly publicized, recent case of Transat AT inc. c. Groupe Mach Acquisition inc [1].

The Transat Case

As many of us saw in the news, Air Transat considered the initial Air Canada offer of 13$/share when it decided to sell. Groupe Mach, who was also interested in the purchase of Transat, presented an innovative offer trying to stop the sale of Transat shares to Air Canada.

Transat sought an order prohibiting Mach’s restricted purchase offer that was intended at 19.5% of Transat's voting shares, which corresponded to 6 900 000 B class actions for 14$/share. The offer was conditional on the granting of proxies and to the dissent linked to any action deposited on or before August 13th, 2019 in response to the offer, even if more than 19.5% of B class actions were deposited, and before taking their delivery [2].

The offer can be qualified as having been innovative, given that it was unprecedented in its structure and that every part of it separately analyzed was legal. However, the majority of the TMF found it abusive and coercive when considering its structure as a whole. Indeed, the offer substantially allowed Mach to get out at any time, even after voting against the Air Canada–Transat arrangement, and the delay (11 days) given to shareholders to consider the offer was found to be too short [3]. Therefore, the Court declared the offer against public interest [4].

To Explore

If this case sparks your interest, you can read the whole judgment, including the dissent by Cristel J. at paras 47–87 who thought that an intervention by the TMF prohibiting the offer in the name of public interest was not warranted [5].

[1] 2019 QCTMF 44 (available on CanLII).

[2] Ibid at paras 38, 41–42.

[3] Ibid at paras 123–126, 153–154, 158, 161, 182–183.

[4] Ibid at paras 11, 182–183.

[5] Ibid at paras 47–87.