Air Canada has finalised the terms of a C$800 million substantial issuer bid that will allow it to repurchase Class A variable voting shares and Class B voting shares through a modified Dutch auction. The offer is due to open on 20 August and run until 24 September, with a price range of C$29.00 to C$33.00 per share and a maximum of 27,586,206 shares, or about 9.8% of the airline’s outstanding stock.
The Montreal-based carrier will fund the buyback in part with proceeds from its recently completed Aeroplan minority equity transaction involving Blackstone, La Caisse and other Canadian institutions. Air Canada has framed the transaction as a way to return capital while preserving balance-sheet strength and room for investment in growth.
Shareholders will be able to tender at a specified price within the range or submit a purchase-price tender for the final auction result. If the offer is oversubscribed, tenders will generally be prorated, although odd-lot holders with fewer than 100 shares will not face proration. The final purchase price has not yet been set, and the buyback remains subject to the conditions in the offer documents.