In a news release on Monday, it was announced that in the all-cash transaction Onex and its affiliated funds will acquire all outstanding shares of WestJet for $31 per share, after which WestJet will operate as a privately-held company.
The purchase price represents a 67 per cent premium to Friday’s closing share price and a 63 per cent premium to WestJet’s 20-day volume-weighted average trading price, said the release.
“Since our first flight in 1996, WestJet has been singularly focused on providing better options for the Canadian travelling public and this transaction retains that commitment,” said Clive Beddoe, WestJet’s Founder and Chairman, in a statement.
“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. Onex’ aerospace experience, history of positive employee relations and long-term orientation makes it an ideal partner for WestJetters, and I am excited about our future.”
“WestJet is one of Canada’s strongest brands and we have tremendous respect for the business that Clive Beddoe and all WestJetters have built over the years. WestJet is renowned internationally for its unparalleled guest experience and employee culture. We’re thrilled to be partnering with WestJetters and continuing this remarkable Canadian success story,” said Tawfiq Popatia, a Managing Director at Onex, in a statement.
Ed Sims, WestJet’s President and Chief Executive Officer, said: “We are delighted to continue the journey of building an airline based on a growing network, providing competitive airfares and more choice to, from and within Canada, for communities large and small. Integral to this relationship is a commitment to our employees, and our unique ownership-driven culture.”
The investment will be led by Onex Partners, Onex’ private equity platform focused on larger investment opportunities, said the release.
“Following an approach by Onex in March 2019, the WestJet board of directors formed a special committee of independent directors to provide the Board with its advice and recommendations with respect to the proposal from Onex and the transaction, and to supervise the negotiation of the terms and conditions of the transaction. After an extensive review of the proposed transaction, the special committee provided its unanimous recommendation of the transaction to the WestJet board of directors. The WestJet board of directors, having received and considered the recommendation of the special committee, determined that the transaction is in the best interests of WestJet and unanimously recommends that WestJet shareholders vote in favour of the transaction at the special meeting of shareholders to be held to approve the transaction,” it said.
Shareholders are expected to vote in July on the transaction.
Founded in 1984 and headquartered in Canada, Onex manages and invests capital in its private equity and credit platforms on behalf of investors from around the world. In total, Onex has US$31 billion of assets under management, including US$6.6 billion of shareholder capital. Onex invests through its two private equity platforms, Onex Partners for larger transactions and ONCAP for middle market and smaller transactions, and Onex Credit which manages primarily non-investment grade debt through collateralized loan obligations, private debt and other credit strategies.