Air Canada (TSX: AC) has completed its $800 million substantial issuer bid, repurchasing and cancelling approximately 27.6 million Class A variable voting shares and Class B voting shares at $29.00 per share. The transaction reduces Air Canada's total shares outstanding to approximately 252.7 million, bringing the count below pre-pandemic levels. The airline describes the completion as a key milestone in its capital allocation strategy, funded in part by proceeds from a minority investment in Aeroplan by funds managed by Blackstone and La Caisse, along with other leading Canadian institutions.

Key Points

  • Air Canada (TSX: AC) has completed its $800 million substantial issuer bid announced in August 2026
  • 27,586,206 shares were repurchased at $29.00 per share and cancelled, representing approximately 9.8% of shares previously outstanding
  • Approximately 252.7 million shares remain outstanding following completion of the offer
  • Investors may be watching how the reduced share count affects per-share financial metrics and Air Canada's ongoing Nouveaux Horizons strategy

Offer Was Oversubscribed, With Proportionate Scaling Applied to Tendered Shares

Air Canada disclosed that approximately 66.8 million shares were validly tendered to the offer in total, making it significantly oversubscribed. Because the offer was oversubscribed, approximately 41% of successfully tendered shares were repurchased, with proportionate scaling applied except to "odd lots," which were exempt from proration. Shares not repurchased — whether due to proration or auction tenders above $29.00 per share — are to be returned to shareholders promptly. TSX Trust Company (Canada) served as depositary and the settlement deadline is on or before October 2, 2026.

Tax Treatment: Deemed Dividend of $18.40 Per Share for Canadian Residents

Air Canada stated that the paid-up capital per share for Canadian income tax purposes is estimated at approximately $10.60. As a result, shareholders who tendered shares under the offer are deemed to have received a dividend of $18.40 per share — the difference between the $29.00 repurchase price and the paid-up capital amount. This deemed dividend qualifies as an "eligible dividend" under the Income Tax Act (Canada) and applicable provincial and territorial tax legislation. The release notes that shareholders should consult their own tax advisors regarding the tax consequences of the transaction.

Buyback Advances Air Canada's Capital Allocation Framework and Balance Sheet Goals

The company stated that completing this offer represents disciplined execution of its capital allocation framework and priorities, returning share count to below pre-pandemic levels. Air Canada noted the transaction is intended to create shareholder value while continuing to invest in its Nouveaux Horizons strategy and maintaining what it describes as one of the strongest balance sheets among its North American peers. The buyback was funded using a portion of proceeds from the Aeroplan minority investment by Blackstone- and La Caisse-managed funds, as well as other leading Canadian institutions.