Canada’s WestJet says its focus on employees and passengers will continue in the wake of a surprise move by private equity player Onex to acquire the Calgary-based airline for $C5 billion($US3.7bn).
The cash transaction will see Onex Corporation and its affiliated funds acquire WestJet for $C31.000 a share, a 67 percent premium on Friday’s closing price.
Founded in 1984 by Canadian billionaire Gerald Schwartz, the Toronto-based Onex has $US31 billion in assets under management.
The WestJet deal isn’t its first tilt at the aerospace industry: it unsuccessfully attempted to buy Air Canada in 1999 and merge it with Canadian Airlines.
That takeover foundered after a dramatic court battle and Canadian media say he has been circling for another major aviation prize ever since.
Other aerospace investments include Aerosystems, bought from Boeing in 2005 and sold in 2014, a stake in catering business Sky Chefs and a less successful investment in Hawker Beechcraft.
The deal comes as WestJet’s share price and profitability have declined in recent years and Onex has yet to outline its plans for the carrier.
Onex managing director Tawfiq Popatia described the airline in the takeover announcement one of Canada’s strongest brands for which his company had tremendous respect.
“WestJet is renowned internationally for its unparalleled guest experience and employee culture,” he said. “We’re thrilled to be partnering with WestJetters and continuing this remarkable Canadian success story.”
But WestJet founder and chairman Clive Beddoe said the deal retained WestJet’s commitment to provide better options for the Canadian traveling public.
“I am particularly pleased that WestJet will remain headquartered in Calgary and will continue to build on the success that our 14,000 WestJetters have created,’’ Beddoe said.
“Onex’ aerospace experience, history of positive employee relations and long-term orientation makes it an ideal partner for WestJetters, and I am excited about our future.”
WestJet chief executive Ed Sims said: “We are delighted to continue the journey of building an airline based on a growing network, providing competitive airfares and more choice to, from and within Canada, for communities large and small.
“Integral to this relationship is a commitment to our employees and our unique ownership-driven culture.”
WestJet’s board formed a special committee to consider the offer after an approach by Onex in March.
The airline said an extensive review of the transaction led to the committee unanimously recommending the transaction to the wider board.
“The WestJet board of directors, having received and considered the recommendation of the special committee, determined that the transaction is in the best interests of WestJet and unanimously recommends that WestJet shareholders vote in favor of the transaction at the special meeting of shareholders to be held to approve the transaction,’’ it said.
The company plans to mail an information circular in late June for a special meeting of shareholders expected to be held in July.
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