By Charles Lefebvre

Potential WestJet sale likely will have positive impact for shareholders

May 13, 2019 | 5:07 PM

MEDICINE HAT, AB — The potential sale of WestJet has likely already had an impact on people’s stock portfolios, according to a local investor.

On Monday, Onex Corporation, a publicly traded private equity firm, announced they plan to purchase WestJet for $5 billion. The deal would see the company pay $31 per share for WestJet stock.

“Assuming the deal goes through, Onex will buy all outstanding WestJet shares for $31 dollars cash, so every shareholder, everyone who holds a share right now, will get $31 cash for each share held in WestJet,” said Matt Solberg, an investment advisor with TD Wealth.

Solberg notes the initial benefit has likely already been seen by shareholders who had purchased before Monday’s announcement. By the end of the trading day on Monday, stock in WestJet was trading at $29.61 per share, up from $18.52 when the Toronto Stock Exchange closed Friday.

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He notes if the sale goes through, WestJet shares will not be able to be traded, as Onex has indicated it plans to take the company private.

“It’s a cash deal, meaning each shareholder gets $31 per share,” he said. “You get $31, the shares go away, Onex has the shares. You can buy Onex shares on the open market, but they would no longer hold WestJet shares.”

Onex, whose investments include Cineplex Entertainment, Autosource and Impark, previously tried to get into the airline business in 1999, when it led a failed attempt to buy and merge Air Canada and Canadian Airlines.

WestJet says the company plans to remain in Calgary.

Shareholders are expected to vote on the proposed sale in July.