Air Canada (AC) Stock Jumps 6% as Blackstone Buys 25% of Aeroplan for $2 Billion
TLDR
- Blackstone and La Caisse are buying a 25% stake in Air Canada’s Aeroplan loyalty program for nearly US$2 billion.
- The deal values Aeroplan at C$10 billion (US$7.2 billion), higher than what the market had priced in.
- Air Canada plans to use the proceeds to repay a billion-dollar bond maturity and cut debt.
- Air Canada stock rose about 6% to C$27.27, hitting its highest level since July 2021.
- Air Canada also beat Q2 earnings estimates, posting adjusted EPS of C$0.40 vs estimates of C$0.15.
Air Canada stock closed up 5.9% at C$27.27 on Tuesday, its highest level since July 2021, after the airline announced a deal to sell a 25% stake in its Aeroplan loyalty program for nearly US$2 billion.
The buyers are a consortium led by Blackstone and Quebec pension fund La Caisse. PSP Investment and the British Columbia Investment Management Corporation are also part of the group.
The transaction values Aeroplan at C$10 billion, or roughly US$7.2 billion. That number caught analysts off guard. Bank of Nova Scotia analyst Konark Gupta called it a “significantly higher value” than the market had assumed, and upgraded the stock to sector outperform.
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