Group Mach is hoping to expand in the leisure and hospitality business with the Transat deal, using its own expertise in the ongoing development of Transat's hotel chains.
Earlier this month, Group Mach said it would take Transat private at C$14 per share in cash, C$1 more than Air Canada's all-cash offer that valued the parent company of leisure carrier Air Transat at C$520 million.
In response to Group Mach's formal offer, Air Canada said it is proceeding toward completion of a definitive purchase agreement to acquire Transat and expects the acquisition process to conclude by the end of this month.
"Air Canada's bid, in contrast to a hostile proposal letter released today, is fully financed, does not require taxpayer assistance and is a wholly Quebec-based solution in the best interests of all stakeholders," Canada's largest airline said in an emailed statement.
In May, Air Canada said it was in exclusive talks to buy Transat, as it looks to boost its leisure travel business to ward off growing competition from WestJet Airlines.
Montreal-based Transat is locked in an exclusivity period with Air Canada that ends on June 26.
Transat confirmed https://bit.ly/2IW2OLh it has received Group Mach's formal proposal and said the real estate developer's offer is conditional on obtaining financing for the deal. The developer has previously said the deal is contingent on Quebec providing about C$120 million in acquisition financing.
(Reporting by Debroop Roy in Bengaluru; Editing by Maju Samuel)