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  • Westjet Sold to Onex

    Well, holy @$%! There were vicious rumours, but nothing concrete...

    https://globalnews.ca/news/5270077/w...old-onex-corp/

    ...I remember the fight for CAI with Onex...and here they are almost a generation later getting a Calgary-based airline into their portfolio...
    President and CEO - Airshow.

  • #2
    And taking it private.

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    • #3
      a 2/3 share premium will likely be pretty attractive to existing shareholders.
      "If you did not want much, there was plenty." Harper Lee

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      • #4
        Wow

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        • #5
          Originally posted by kkozoriz View Post
          And taking it private.
          Yes, but Onex itself it publicly traded: https://ir.onex.com/stock-information

          Airlines are one of the most volatile businesses out there. Combining Westjet with a range of other businesses, some of which are more recession proof, seems to make a lot of sense.

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          • #6
            Originally posted by East McCauley View Post
            Airlines are one of the most volatile businesses out there. Combining Westjet with a range of other businesses, some of which are more recession proof, seems to make a lot of sense.
            I'm not really a fan of that logic - its better for investors to diversify by choosing different companies in their portfolio, allowing companies to focus on what they are good at. At the end of the day here though, presumably West Jet sees some advantages of being private, given the price differential. It appears to be a big value add for their shareholders (i.e. pension funds, etc.), so it makes sense they are doing this.

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            • #7
              airlines can arguably be one of the most difficult businesses to analyze.

              firstly, they are extremely sensitive to market cycles - both business and personal air travel are highly discretionary (which may make this acquisition a positive in terms of it being an overall economic projection by onex).

              secondly, airlines are one of the few - if not the only - business model that doesn't control either it's income or its expenses which makes it difficult to manage or forecast either internally or externally with any real degree of accuracy or certainty.
              "If you did not want much, there was plenty." Harper Lee

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              • #8
                The new single private owner ONEX, (subject to shareholder acceptance), is Toronto based as we all know. Major financial decisions to be taken by/for WS will be made in Toronto by ONEX not by WS out in YYC. No doubt WS executive organizational structure will change, with new reporting lines to key ONEX Execs.

                That is a hell of a premium price and the ONEX investors will want that returned quickly. I would not be surprised to see route cuts and Swoop metal sold if its not profitable. Will ONEX actually keep this company and operate long term? I doubt it and here is what their core mission states: "manages and invests capital in its private equity and credit platforms on behalf of investors from around the world". Investors in ONEX private equity placements expect solid returns ... not asks for more capital to grow a company. Makes me wonder what ONEX is really up to by this acquisition as "The investment will be led by Onex Partners, Onex’ private equity platform".

                https://ir.onex.com/static-files/92b...1-f6da878d1b05
                Last edited by EdmTrekker; 13-05-2019, 09:29 AM.

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                • #9
                  Originally posted by EdmTrekker View Post
                  That is a hell of a premium price and the ONEX investors will want that returned quickly.
                  WJA was as high as $22 a few months ago. a 40% premium is pretty standard on a takeover like this. It was over $31 4 years ago.

                  I don't think we're going to see substantial changes to WJ or their business model. ONEX owns a lot of companies, though most of them are not consumer-focused. Cineplex is a good example. They've certainly grown and expanded since the ONEX takeover.
                  https://www.onex.com/portfolio

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                  • #10
                    National and multinational conglomerates are some of the biggest problems in the world.... Westjet now owned by one. Many of these conglomerates have more power and influence in the world than many non-G8 countries.
                    A people that elect corrupt politicians, imposters, thieves and traitors are not victims, but accomplices.

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                    • #11
                      Originally posted by nobleea View Post
                      Originally posted by EdmTrekker View Post
                      That is a hell of a premium price and the ONEX investors will want that returned quickly.
                      WJA was as high as $22 a few months ago. a 40% premium is pretty standard on a takeover like this. It was over $31 4 years ago.

                      I don't think we're going to see substantial changes to WJ or their business model. ONEX owns a lot of companies, though most of them are not consumer-focused. Cineplex is a good example. They've certainly grown and expanded since the ONEX takeover.
                      https://www.onex.com/portfolio
                      ONEX is not invested in Cineplex. That investment ended in July 2004. Cineplex is a publicly traded company and ONEX was in with an equity situation which was either repaid with interest or sold off.

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                      • #12
                        Originally posted by EdmTrekker View Post
                        ONEX is not invested in Cineplex. That investment ended in July 2004. Cineplex is a publicly traded company and ONEX was in with an equity situation which was either repaid with interest or sold off.
                        You're right. Onex got rid of the last of its Cineplex investment in 2009.

                        My point was, I'm not worried about it. They have a history of taking what they see to be undervalued companies, take them private, make them work, and then either sell them or put them on the stock market. They've always been big in the aviation world with Boeing's Kansas and Oklahoma manufacturing facilities and buying the former Hawker Beechcraft.

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                        • #13
                          The only positive I am hoping for is the reversal of their dominance at YYC......they're willy nilly routes to Austin, Atlanta, Portland and Nashville will be scrutinized and hopefully re-route some metal our way to more sensible locations.....

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                          • #14
                            Originally posted by EdmTrekker View Post
                            The new single private owner ONEX, (subject to shareholder acceptance), is Toronto based as we all know. Major financial decisions to be taken by/for WS will be made in Toronto by ONEX not by WS out in YYC. No doubt WS executive organizational structure will change, with new reporting lines to key ONEX Execs.
                            That is definitely going to happen. The play is the same play as 1987 with PWA/CP becoming Canadian. You cannot have a national airline with a regional name. It won't be "west"jet much longer.

                            Originally posted by EdmTrekker View Post
                            That is a hell of a premium price and the ONEX investors will want that returned quickly. I would not be surprised to see route cuts and Swoop metal sold if its not profitable.
                            Swoop and Encore are not a part of the deal. Just WestJet. They will change this into a full service airline and leave the ULCC stuff to whatever they make Swoop and Encore.

                            Originally posted by EdmTrekker View Post
                            Will ONEX actually keep this company and operate long term? I doubt it and here is what their core mission states: "manages and invests capital in its private equity and credit platforms on behalf of investors from around the world". Investors in ONEX private equity placements expect solid returns ... not asks for more capital to grow a company. Makes me wonder what ONEX is really up to by this acquisition as "The investment will be led by Onex Partners, Onex’ private equity platform".
                            They are in it for the short term as they see WJA as undervalued. They are going private to really shake things up....including the union...IMO...then make it public or sell it ASAP. This, again, is the exact playbook from 1999.

                            President and CEO - Airshow.

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                            • #15
                              Originally posted by maclac View Post
                              The only positive I am hoping for is the reversal of their dominance at YYC......they're willy nilly routes to Austin, Atlanta, Portland and Nashville will be scrutinized and hopefully re-route some metal our way to more sensible locations.....

                              Don't hope too hard. With ONEX at the helm, there will be definite pressure for high returns on metal. WJA will still dominate at YYC.
                              President and CEO - Airshow.

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