MONTREAL -- Air Canada's board unanimously recommended to the
carrier's shareholders that they "just say no" to a hostile
takeover by the Onex Corp.
At the same time, the carrier sought an interim order in Quebec
Superior Court that would prevent Airco, Onex's takeover vehicle,
from proceeding further with its offer until the court rules on
its
legality.
Air Canada said the offer is in apparent violation of a law
passed when the airline was privatized that limits the maximum
individual holding of common shares to 10%.
The Onex deal would acquire and combine Air Canada and its
rival, the long-ailing Canadian Airlines.
Air Canada president Robert Milton held a telephone press
conference to reiterate the board's contention that Onex and its
partner in the takeover quest, AMR Corp., are up to no good.
"It is clear that the proposal is structured to rescue Canadian
Airlines at Air Canada's expense," Milton said.
He said the deal would transfer $1 billion in value from Air
Canada's shareholders to shareholders of Onex and AMR, parent of
American Airlines, which has a partnership with Canadian.
Furthermore, Milton said, "we are not about to turn over control
of most of Canada's airline industry to Dallas."
Milton said Dallas-based American effectively controls Canadian
Airlines, and he suggested American would be calling the shots for
the merged airline that Onex envisions.
Milton also said 70% of the 5,000 jobs that Onex said would be
eliminated through a merger would be held by Air Canada employees;
he said Air Canada has been in a "growth mode," so many of its
employees have less seniority.
"That would be absolutely unfair to those of us who have worked
so hard" at Air Canada, Milton said.
He also took issue with Canadian Airlines' reasons
for rejecting Air Canada's earlier proposal to buy its
rival's
international routes.
Canadian had said Air Canada wanted to wrest away the most
profitable piece of its business, but "for an airline that loses $1
million a day, it's hard to fathom how this is profitable," Milton
said.
He also said Air Canada was "actively" working on other
proposals to fend off the Onex bid.
He said he would not comment as to whether Star Alliance
partners such as Lufthansa or United Airlines might put up a
counterproposal, but "you can clearly count Star as [Air Canada's]
friends," he said.
"They're there, they are friendly and supportive, and I am
supremely confident."