Based Onex Corporation buys WestJet for $5 billion

Cornelia Mascio
Мая 16, 2019

If Onex obtains shareholder and regulatory approvals, the deal would help Schwartz get his hands on an airline two decades after he missed out on buying Air Canada, WestJet's bigger rival.

Onex, whose investments include Cineplex Entertainment, Autosource and Impark, previously tried to get into the airline business in 1999, when it led a failed attempt to buy and merge Air Canada and Canadian Airlines.

Onex will acquire outstanding WestJet shares for $31, a 67 per cent premium when compared to Friday's closing share price.

"To me it looks like they're trying to capitalize on a situation where a company is a bit down and out because of the impact of launching a lot of initiatives that have yet to pay off, as well as the fallout from the pilot situation previous year", he said. The board unanimously agreed to accept Onex' offer.

A couple of airline investments that would have been among the most high profile in Canada never took place.

Onex Corp. has signed a friendly deal to buy WestJet Airlines an all-cash transaction of $3.5 billion.

The Onex bid comes at a time when private equity is taking off in aviation. Air Canada shares jumped 5.5 percent, while the broader Canadian stock index was down 1%.

The deal was announced before markets opened on Monday.

WestJet's board of directors formed a special committee of independent directors to provide advice after being approached by Onex in March 2019.

Longview's Martin Cej represents Onex in the transaction.

WestJet has been sold and the company fetched quite the haul.

WestJet shares, which touched a record high of C$34.95 in December 2014, have recently been trading at nearly half that level.

"Privatizing tends to be easier to generate value longer term", said Chan.

WestJet chief executive Ed Sims, who will remain CEO, said "there are no job losses planned as a direct effect of this transaction".

"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", WestJet Founder Clive Beddoe said.

"We do not believe this transaction dramatically alters the competitive landscape, at least negatively", Canaccord Genuity analyst Doug Taylor said.

"WestJet was generally well-funded and was already embarking on a large and highly competitive expansion plan". "In our view, a private equity owner of an airline is likely to remain rational with respect to its approach to yields and profitability (versus) market share".

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