Air Canada Receives Onex Proposal

Air Canada announced that it has today received a copy of the takeover bid circular of Airline Industry Revitalization Co. (“AirCo”), a corporation controlled by Onex Corporation (“Onex”), respecting the offer by AirCo to acquire all the issued and outstanding Common Shares and Class A Non-Voting Shares of the Corporation.
The Offer provides a purchase price per Air Canada Share of either $8.25 in cash or one common share of AirCo, at the option of the Air Canada shareholders, subject to proration so that the aggregate consideration payable under the Offer would not exceed 50% cash or 50% AirCo shares. AirCo has proposed to merge Air Canada and Canadian Airlines. AMR, the parent company of American Airlines, which also owns 33% of Canadian Airlines, is a major partner of Onex in AirCo.
The Offer is stated to expire on November 9, 1999, unless extended or withdrawn.
“In reviewing the Onex-American Airlines proposal, Air Canada`s Board of Directors will consider shareholder value as its first priority,” said Robert Milton, President and CEO. “Given the complexity of the proposal and the issue of industry restructuring as a whole, the Board will take the necessary time to review this unsolicited and below-market offer. We owe it to our shareholders, to our employees, and to the Canadian travelling public to assess all our options carefully.”