NYTimes.com Article: Court Approves Bid for Stake in Air Canada

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Court Approves Bid for Stake in Air Canada

December 9, 2003





By The New York Times

TORONTO, Dec. 8 - The Ontario Superior Court on Monday
approved a bid by an investment company controlled by
Victor Li, son of the Hong Kong magnate Li Ka-shing, to
become the largest single shareholder in Air Canada.

But the investment company, Trinity Time Investments, still
faces a rival bid from Cerberus Capital Management of New
York, which said it would make a new offer on Tuesday.

Air Canada has been under court protection since April. It
carries about two-thirds of Canada's domestic traffic.

At the hearing on Monday, a court-appointed monitor
supported the bid from Trinity for a 31 percent equity
stake valued at 650 million Canadian dollars ($498
million). The court also gave the go-ahead for a rights
offering led by Deutsche Bank that would allow creditors to
own up to 41 percent of the restructured airline.

Air Canada's board chose Trinity ahead of Cerberus in early
November, but Cerberus, which specializes in buying stock
in distressed companies, later asked the airline to
consider an improved bid that would give creditors the
opportunity to acquire a larger equity stake.

Air Canada has the right to terminate the Trinity agreement
if it decides to pursue a more attractive proposal. The
ruling on Monday entitles Trinity to claim a breakup fee of
19.5 million Canadian dollars if Air Canada accepts a new
Cerberus offer.

http://www.nytimes.com/2003/12/09/business/worldbusiness/09air.html?ex=1071978004&ei=1&en=6425958e58437893


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