Chorus confirms it has received a non-binding takeover offer
Company operates regional flights for Air Canada and leases regional aircraft around the world
Chorus Aviation share prices jumped Friday on news it was the target of a takeover offer.
The Halifax-based company specializes in leasing regional aircraft to airlines around the world. It also operates most of Air Canada’s regional turboprop and small jet services.
“Chorus Aviation Inc. confirmed today that it has received a preliminary, non-binding acquisition proposal from a third party that is subject to a number of significant conditions,” the company said in a late afternoon news release. “There can be no assurance that any transaction will occur, or as to the timing, structure or terms of any transaction.”
The stock closed Friday at $3.18. That’s higher than its been since August, but still half the price shares traded at in February, before the pandemic.
Worried about the fall in its share price, Chorus adopted a poison pill in May. The move was meant to prevent someone from quietly buying up stock on the cheap. “We have adopted the Rights Plan to protect against those who may seek to take advantage of the current market environment to the detriment of Chorus and its shareholders,” said Joe Randall, Chorus’ President and Chief Executive Officer.
An outright offer would normally be exempt from the Shareholder Rights provisions.
Like so many other carriers, Chorus slashed capacity in response to COVID-19. Still, its contract with Air Canada allowed Chorus to declare a small profit in its last quarterly report.
“Our Air Canada Express operation is a fraction of what it was this time last year,” said Randell in August. When Air Canada cut 30 routes this summer, 21 of them were operated by Chorus.
Still, Chorus executives believe regional aviation will lead the comeback from COVID-19. In Atlantic Canada where Chorus is based, residents are allowed to travel freely within the region. Anyone coming from outside the region, however, faces quarantines and other restrictions. That favours regional flights over long-haul routes.
In September, Chorus placed a new Airbus A220 with air Baltic. It was the third of five aircraft on long-term lease to the Latvian carrier.
The company did not say who the interested buyer was. The company said it would not comment further “unless or until there is a transaction to announce.”
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