WestJet shareholders won't get December dividend as Onex acquisition closes
Onex says payment won't be made because the deal closed before Dec. 18
WestJet Airlines Ltd. shareholders won't be receiving a quarterly dividend this month after Onex Corp. announced the completion of its acquisition of the Calgary-based airline.
WestJet and Onex say the payment won't be made because the deal has closed before Dec. 18.
The airline's board of directors had declared a 14 cents per share dividend on Oct. 28 to be paid on Dec. 31 to shareholders next week.
The Toronto-based private equity firm and its affiliated funds say the deal closed following a final regulatory approval Tuesday by the Canadian Transportation Agency that found WestJet continued to meet Canadian ownership and control requirements following its purchase by Onex.
Onex says its portion of the total equity investment is about $345 million as a limited partner and largest investor in Onex Partners V. It declined to disclose further terms of the transaction.
WestJet shareholders will receive $31 in cash for each share and the shares will be delisted from the Toronto Stock Exchange within a few trading days.
The Canadian Transportation Agency required Onex to amend its bylaws to ensure that matters related to WestJet be voted by the board of directors where a majority of Canadian directors are present.
Analyst Chris Murray of AltaCorp Capital says the transportation regulator's conditions were "not unexpected but should be manageable."
"While the review by the CTA has taken longer than our initial expectations, the determination that Onex needs to operate as Canadian as the parent company of Kestrel Bidco, the vehicle created to facilitate the takeover transaction, does not appear onerous," he wrote in a report.