MONTREAL— The head of Quebecor Inc. says he is exploring a possible acquisition of Montreal-based tour operator Transat A.T., but another prospective buyer is already a step ahead.
Chief executive Pierre Karl Peladeau said Thursday he has commissioned a financial analysis by an investment firm.
“I believe it’s a very good brand. I think Quebecers like Transat,” he said Thursday after Quebecor’s annual shareholder meeting.
“I will continue to fight for Quebec companies to stay here. I think that that could be an interesting…opportunity.”
Peladeau, the controlling shareholder of Quebecor and son of its deceased founder, said he personally ordered the analysis—not his company—but “it’s premature to close any sorts of doors.”
Peladeau is not the only interested party. Montreal developer Vincent Chiara, who owns Groupe Mach, which bought the former CBC tower in Montreal in 2017, told The Canadian Press he has already submitted an offer following several months of talks.
“We had the idea of building a portfolio in the hospitality industry and they had a platform and projects in their plans to build exactly that,” said Chiara, referring to Transat’s $750-million plan to develop a hotel chain in Mexico’s Riviera Maya and the Caribbean.
He said Transat’s fleet of about 40 planes is particularly appealing to Groupe Mach, which until now has focused on Quebec real estate.
“They have the means to move the passengers who go to the destination…They have an important capacity to fill rooms and with this capacity, we eliminate a lot of risks for hotel development.
“Of course, we want to privatize…Our proposal is to buy out all the shareholders,” he added.
Quebec Economy Minister Pierre Fitzgibbon said that more than two potential buyers have their eyes on Transat.
The business is geared toward “knowledgeable adults,” he said in a scrum in Quebec City, noting the fierce competition of the airline and holiday tour industries.
“Historically, a lot of people have had failures…I’m not expecting to have 25 buyers.”
Transat confirmed last week it had spoken with several parties about a possible sale of the company.
Last year the travel company bought a pair of adjacent properties in the village of Puerto Morelos—less than 40 kilometres from Cancun—with the goal of building a beach resort.
Peladeau also used his time at the Quebecor AGM to rail against Bell TV, calling its actions “completely abhorrent.”
In April, Peladeau temporarily suspended TVA Sports’ signal for Bell subscribers until a judge ordered the return of the service. Quebecor has criticized Bell for not paying it royalties that reflect the fair value of its specialty channels, especially TVA Sports, which is suffering because the Montreal Canadiens missed the playoffs for a second consecutive year.
The hockey team’s losing record has hit advertising sales, raising questions about the viability of the specialty channel, which was launched in 2011 and has lost more than $150 million in six years.
“Maybe we were a little bit naive regarding this,” Peladeau said. “We have been patient. But…there is always an end to patience.”
“It’s wearing thin,” added chairman and former prime minister Brian Mulroney.
Quebecor more than doubled its dividend as it reported its first-quarter profit rose compared with a year ago.
The media and telecommunications company said Thursday it will now pay a quarterly dividend of 11.25 cents per share, up from 5.5 cents.
The increased payment to shareholders came as Quebecor says it earned $189.0 million or 74 cents per share in the first quarter of 2019, up from $57.1 million or 24 cents per share a year earlier.
Revenue totalled nearly $1.03 billion for the quarter ended March 31, compared with $1.00 billion in the first quarter of 2018.
On an adjusted basis, Montreal-based company said it earned 44 cents per share from continuing activities compared with 38 cents per share a year ago.
Analysts on average had expected a profit of 44 cents per share and revenue of $1.03 billion, according to Thomson Reuters Eikon.
Analyst Drew McReynolds of RBC Dominion Securities pointed to “wireless momentum” at Videotron, Quebecor’s telecommunications subsidiary and biggest revenue generator.
The company added about 40,000 wireless subscribers thanks largely to Fizz Mobile, a discount carrier launched in November as part of a push into new wireless and television broadcasting areas as its traditional businesses of media and cable fade.
—With files from Julien ArsenaultNews from © Canadian Press Enterprises Inc. 2019