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Onex Buying Westjet

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  • Onex Buying Westjet

    https://business.financialpost.com/t...including-debt

    Onex is buying WestJet in $5 billion deal ó and taking it private

    Airline's shares up 62 per cent on the news


    WestJet shares soared 62 per cent Monday to trade slightly below the $31-per-share offer price. Postmedia

    CALGARY ó Onex Corp. has signed a friendly deal to buy WestJet Airlines Ltd. in a transaction it valued at $5 billion, including assumed debt.

    Under the agreement announced Monday, Onex will pay $31 per share for WestJet, which will then operate as a privately held company.

    Shares in the airline closed at $18.52 on Friday. WestJet shares surged as much 63.3 per cent Monday to $30.24 ó highest since March 2015

  • #2
    Interesting. One of their big draws to their employees was always stock in the company and WestJet staff being "owners".

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    • #3
      Originally posted by Bingo_Arms View Post
      Interesting. One of their big draws to their employees was always stock in the company and WestJet staff being "owners".
      I've worked for a company that Onex bought and a few years later turned public (while they maintained a significant controlling interest). I suspect that there will be some kind of share offering to employees once this closes.

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      • #4
        Originally posted by Bingo_Arms View Post
        Interesting. One of their big draws to their employees was always stock in the company and WestJet staff being "owners".
        I suspect that went out the window when they joined a Union.

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        • #5
          Originally posted by Bates View Post

          I suspect that went out the window when they joined a Union.
          I always thought it was their version of a pension for the employees (the shares)...

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          • #6
            Private companies can offer ownership as well. Mind you the perks are a lot less - ie a liquid market to sell your shares once they vest.

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            • #7
              It sounds like the HQ will remain in Calgary, at least for now.

              I wonder if customers will see a difference in service?

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              • #8
                Originally posted by Marcus Aurelius View Post
                It sounds like the HQ will remain in Calgary, at least for now.

                I wonder if customers will see a difference in service?
                Personally I've been seeing a difference in service for a few years now. I suspect it won't be improving.

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                • #9
                  Originally posted by Marcus Aurelius View Post
                  It sounds like the HQ will remain in Calgary, at least for now.

                  I wonder if customers will see a difference in service?
                  It makes zero sense for most companies to continue to setup shop in Vancouver and Toronto. They would loose a ton of employees due to the cost of living in those cities. Calgary offers a significant quality of life being close to Banff. It is a large city with multiple pro teams and a pretty good city for entertainment.

                  It is is hard to say how well this will work for customers.

                  As for employees many of them have shares and they just got a huge increase overnight. The one risk is that some of the older pilots may choose to retire with the stock payout. I also suspect many other senior employees may choose to leave with the stock buyout. Many of those employees own a decent amount of stock and the value just went up big time

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                  • #10
                    Originally posted by Cflgridiron View Post

                    It makes zero sense for most companies to continue to setup shop in Vancouver and Toronto. They would loose a ton of employees due to the cost of living in those cities. Calgary offers a significant quality of life being close to Banff. It is a large city with multiple pro teams and a pretty good city for entertainment.

                    It is is hard to say how well this will work for customers.

                    As for employees many of them have shares and they just got a huge increase overnight. The one risk is that some of the older pilots may choose to retire with the stock payout. I also suspect many other senior employees may choose to leave with the stock buyout. Many of those employees own a decent amount of stock and the value just went up big time
                    When Onex buys companies, they don't integrate acquisitions into the Onex company, it is a holding company. As such, they wouldn't look to move HQ to Toronto under the Onex umbrella.

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                    • #11
                      Originally posted by Cflgridiron View Post

                      It makes zero sense for most companies to continue to setup shop in Vancouver and Toronto. They would loose a ton of employees due to the cost of living in those cities. Calgary offers a significant quality of life being close to Banff. It is a large city with multiple pro teams and a pretty good city for entertainment.

                      It is is hard to say how well this will work for customers.

                      As for employees many of them have shares and they just got a huge increase overnight. The one risk is that some of the older pilots may choose to retire with the stock payout. I also suspect many other senior employees may choose to leave with the stock buyout. Many of those employees own a decent amount of stock and the value just went up big time
                      The concern of possibly moving the HQ to Toronto was because itís a subsidiary. Many of the functions within the company already exist and streamlining some might reduces costs, some which are duplicates.

                      Youíre right the employees, especially those who have accumulated stock over time, will likely do very well.
                      Last edited by Marcus Aurelius; 05-14-2019, 06:51 AM.

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                      • #12
                        Originally posted by Marcus Aurelius View Post

                        The concern of possibly moving the HQ to Toronto was because itís a subsidiary. Many of the functions within the company already exist and streamlining some might reduces costs, some which are duplicates.

                        Youíre right the employees, especially those who have accumulated stock over time, will likely do very well.
                        You canít just easily move functions to another location For large companies without significant cost.

                        If companies want to save money never hire any consultant company that says they can fix your business.

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                        • #13
                          Originally posted by Cflgridiron View Post

                          You canít just easily move functions to another location For large companies without significant cost.

                          If companies want to save money never hire any consultant company that says they can fix your business.
                          I see it doesnít apply in this case (thanks go riders) but companies are purchased all the time with the aim of streamlining operations within existing structures to cut costs. The potential losses you raised could even be part of a larger tax strategy.

                          Anyway, itís good news locally that jobs and operations will remain.

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                          • #14
                            The question for me is are they going to change or get rid of the WestJet MasterCard and the rewards that go with it?

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                            • #15
                              Originally posted by nernzi19 View Post
                              The question for me is are they going to change or get rid of the WestJet MasterCard and the rewards that go with it?
                              I would think that would be a PR nightmare to outright cancel the rewards, especially to their most loyal customers. Changes though? Who knows.

                              Just got the WestJet card myself. Signed up for the free checked bags and the 99$ companion fare, like everybody else, so I hope they don't touch that.
                              Last edited by Canyon11; 05-15-2019, 12:53 PM.

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