Private equity firm buys Canada's WestJet airline

Onex shakes up Canada’s airline industry with all-cash deal to buy WestJet

Onex shakes up Canada’s airline industry with all-cash deal to buy WestJet

Onex Partners, Onex's private equity platform, will oversee the deal.

WestJet has been sold to Toronto-based Onex Corporation for a cool $5 billion.

The WestJet deal isn't its first tilt at the aerospace industry: it unsuccessfully attempted to buy Air Canada in 1999 and merge it with Canadian Airlines.

Onex and its affiliates will acquire all outstanding shares of WestJet for CAD$31 per share, a 67 percent premium to last week's closing price, and a 63 percent premium to the airline's 20-day volume-weighted average trading price.

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

The Onex bid follows a deal last week where low-priced Latin American airline Viva Air received a $50 million investment from USA capital fund Cartesian Capital Group that it will direct toward expansion. The corporate battled landed in court, where Onex was rebuffed, and its bid withdrawn.

That filing triggered another thwarted investment by Onex, which had been attempting to purchase a piece of Aeoroplan, Air Canada's frequent-flyer program.

WestJet shares closed at $18.52 on Friday.

Onex first approached WestJet's board in March.

Longview's Martin Cej represents Onex in the transaction. "This announcement has many workers very nervous about their future and anxious that the recent arbitrary changes the company has been making might only be the start of things to come", said Unifor Organizing Director Kellie Scanlan.

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

WestJet CEO Gregg Saretsky on the airline's outlook and growth.

Onex is buying WestJet and taking it private.

WestJet's board of directors has unanimously recommended shareholders vote in favour of the deal at a meeting expected to be held in July.

"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 managing director Tawfiq Popatia described the airline in the takeover announcement one of Canada's strongest brands for which his company had tremendous respect.

"By moving to private ownership, it is our hope that WestJet will have greater latitude to make long-term strategic investments, growing its fleet and global network of destinations, including direct overseas flights from Alberta", Kenney said in a statement.

Unifor will be reaching out to frontline workers across Canada in the days and weeks ahead as the sale of the company moves through shareholder and regulatory approvals.

Taylor, the Canaccord Genuity analyst, said the Onex acquisition would not dramatically alter the competitive landscape.