Air Canada says it will spend more to buy Transat A.T., upping its total offer by $200 million and winning the support of the tour company's largest shareholder.
The new deal sees Air Canada spending $18 per share, rather than $13, bringing the total offer to roughly $720 million.
Air Canada says it now has the backing of Letko Brosseau and Associates Inc., Transat's largest shareholder, which holds just over 19 per cent of outstanding shares.
The investor previously said it wouldn't support the deal if the purchase price remained at $13 per share.
The move comes as Transat has been facing off against rival bidder, the Montreal developer Group Mach, at a securities tribunal hearing over Mach's move to block Transat's sale to Air Canada.