Air Canada faces a counter bid for Canadian tour operating and airline group Transat.

Real estate developer Group Mach yesterday topped the flag carrier’s offer for the operator of leisure airline Air Transat.

Transat reiterated that it has entered into an agreement with Air Canada and had agreed a 30-day binding period of exclusive negotiations.

“During this exclusivity period it is contemplated that Air Canada will complete its due diligence review and the parties will finalise the negotiation of a definitive agreement regarding the acquisition of all of the shares of Transat,” the company added.

“This exclusivity period expires towards the end of June 2019.

“The operations of Transat continue in their normal course and there will be no change for its clients, suppliers and employees.

“In particular, travellers and clients of Transat can continue to travel and book their flights and vacation packages with Transat as usual.”

However, Mach made an offer of C$14 a share, C$1 more than Air Canada’s bid.

The aim would be to build a global vertically integrated brand under the Transat banner, with a focus on hotel development.

The offer would involved TM Grupo Inmobiliario, the largest residential and leisure real estate developer in Spain and preferred hotel supplier of Transat in Mexico, contributing C$15 milion in exchange for a minority equity stake in Transat together with three Mexican hotels wit 1,000 rooms.

Mach also pledged to expand travel packages for Canadians to include European destinations at “very competitive pricing” including in Spain, supported by TM’s “vast hotel portfolio” from 2020.

Mach president and CEO Vincent Chiarasaid: “We are excited about the potential synergies between our companies in which the leading integrated international tourism model of Transat could be combined with Mach’s vast experience in overseeing the construction, ownership and management of complex real estate development projects in a cost-effective manner and its on-going initiatives at modernizing the leisure travel experience.”