MONTREAL — The board of directors of Transat AT Inc. has approved a takeover offer by Air Canada valued at $520 million.
The companies announced Air Canada will pay $13 per share for the travel company.
Under the deal, Air Canada says it intends to preserve the Transat and Air Transat brands and maintain the Transat head office and its key functions in Montreal.
The Air Canada deal is subject to regulatory and shareholder approvals.
In approving the Air Canada offer, the Transat board turned down a rival bid by Group Mach Inc. The Quebec real estate developer has offered $14 per share for Transat.
The Air Canada deal includes a break fee of $15 million payable by Transat if it accepts a superior proposal. Air Canada must pay a reverse break fee of up to $40 million if the deal is cancelled because regulatory or governmental approvals are not obtained, subject to certain conditions.