Air Canada to buy back $800M in shares, returning share count to pre-COVID levels

Air Canada plans to buy back approximately $800 million worth of its own shares, a move that will reduce the airline’s outstanding share count to pre-pandemic levels.

The airline announced Friday (Sept 25) that it expects to purchase and cancel 27.6 million shares at $29 each through its recently completed share buyback offer.

The shares represent about 9.8 per cent of Air Canada’s total outstanding shares as of Sept. 24, before the buyback takes effect.

About 66.8 million shares were submitted by shareholders at or below the final $29 purchase price.

Because the offer was oversubscribed, Air Canada expects to purchase roughly 41 per cent of the eligible shares submitted by most participating shareholders. Certain small holdings, known as “odd lots,” are exempt from that proration.

Once the transaction is completed, Air Canada expects to have approximately 252.7 million shares outstanding.

Funding the buyback

Air Canada said the $800-million purchase will be funded partly with proceeds from its recent minority equity investment in Aeroplan by funds managed by Blackstone and La Caisse, along with other Canadian institutions.

The airline characterized the buyback as an important step in its capital allocation strategy, saying it will return its share count to levels last seen before the COVID-19 pandemic.

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