Péladeau Advocates for Major Board Changes at Transat A.T.

Post by : Mina Rahman

Business tycoon Pierre Karl Péladeau is making waves at Transat A.T. Inc., calling for a comprehensive overhaul of its board to tackle the airline’s persistent difficulties.

As CEO of Quebecor Inc. and the second-largest shareholder of Transat, Péladeau proposes cutting the board's size from 11 to six members. He has put forth his own candidacy, alongside Jean-Marc Léger, a prominent economist, and Quebecor's vice-chair, André Brosseau, for the available positions.

In his statement, Péladeau criticized Transat's balance sheet as “broken” and insisted on an extensive review of its management practices, underlining the importance of demonstrating the board's dedication to enhancing value for shareholders and all stakeholders involved.

He has urged Transat to conduct a special shareholders' meeting by February 6 to discuss his proposals. In response, Transat stated it is assessing his request, revealing that several board members have previously engaged with Péladeau to find viable solutions, including amendments to board structure.

Péladeau's interest in Transat dates back to 2020 when he made a $5-per-share bid to purchase the airline, a proposal that was overshadowed by a competing offer from Air Canada. That acquisition attempt fell through after European regulators expressed concerns about approving the deal. Currently, his investment firm, Financière Outremont Inc., holds a 9.5% stake in Transat.

The Montreal-based airline has encountered ongoing hurdles, such as fierce competition in the vacation travel sector, a heavy debt burden, and disruptions related to the pandemic. Earlier this year, it underwent a significant debt restructuring that let go of hundreds of millions in owed funds. Further operational challenges, including engine recalls impacting four aircraft and a potential strike led by the Air Line Pilots Association, loom on the horizon.

In spite of these obstacles, Transat’s shares rose almost four percent to $2.28 on the Toronto Stock Exchange following Péladeau’s announcement, signaling investor optimism regarding upcoming changes.