Air Canada Wants Onex Offer Nixed
MONTREAL (AP) _ Air Canada sent a letter to shareholders Friday asking them to vote against the $772 million cash and stock bid from Onex Corp. and American Airlines.
Air Canada also asked its investors to ratify a poison pill defense, which would discourage hostile takeovers by making them prohibitively expensive.
The airline sent the letter after Onex won court permission to call a shareholder meeting and force a vote on its offer of $5.31 a share for the Montreal-based airline. The meeting is set for Nov. 8.
In the letter, Air Canada continued to claim that the price ``doesn’t reflect the true value and superior prospects of Air Canada,″ and ``appears to have been structured to significantly benefit the interests of″ American Airlines.
It’s widely expected that a counter bid will be made before the meeting, probably by a consortium of Air Canada airline partners and financial groups.
The company said it is confident that its shareholders will confirm the board’s conclusion that the Onex-American Airlines offer is ``unacceptable.″ It said ``the board and management are absolutely focused on delivering superior value and the right outcome for all stakeholders.″
Meanwhile, Air Canada is continuing legal challenges on two fronts. It claims the Onex bid breaks the 10 percent ceiling imposed on single shareholders and that the federal Competition Bureau has been excluded from the matter.