Start of a bidding war? A second bid launched to buy Transat

A Montreal-based real estate developer has made a takeover offer for Transat AT Inc. worth $14 per share in cash, which is above what Air Canada has proposed.

The offer from Group Mach Inc. comes after Transat announced last month it was in exclusive talks to be acquired by Air Canada, which was proposing to pay $13 per share.

Trading in Transat shares has halted ahead of the announcement. The shares closed at $11.84 on the Toronto Stock Exchange on Monday.

Mach says the offer is the culmination of a process that began when it approached Transat in January.

Under its offer, the company committed to keep Transat's head office, executive team and centre of decision-making in Montreal.

Transat offers vacation packages, hotel stays and air travel under the Transat and Air Transat brands.

Meanwhile, Karl Moore, with the McGill University School of Management and a frequent contributor to CJAD 800, suggests the new offer could be the first step in a bidding war between Air Canada and Mach.

"To some degree it boils down to if it's a legitimate offer, which it seems to be, from both sides, who bids the most?" Moore says. "And you get into, potentially, a bidding war, and somebody decides it's getting too expensive for them, and then backs down, and lets the other side win."

Moore notes the two companies are in it for very different reasons — Air Canada's interest is mainly in Transat's airline operations; Mach appears interested mainly in its hotel and real estate operations.

CJAD 800's Richard Deschamps contributed to this report.