Schwartz considers buying into Air Canada - Texas Pacific Group

[dArKeR]

Toronto financier Gerald Schwartz, who failed three years ago to acquire Air Canada, is in talks with U.S. investors about taking another run at the airline.

Sources said that U.S. investment powerhouse Texas Pacific Group is seeking Canadian partners to acquire $700-million of equity in Air Canada, which has given investors until this week to submit preliminary offers. Mr. Schwartz's Onex Corp. is one of a number of potential partners that the Houston-based company has approached to skirt Canada's foreign ownership limits on airlines.

For its part, Onex is believed to be considering an Air Canada investment to ensure that it eventually obtains long-sought control of the airline's Aeroplan frequent flyer points division and other possible assets. Onex lost its exclusive rights to bid for Aeroplan this summer when Air Canada filed for bankruptcy protection. One person familiar with the talks said Onex has not yet reached a final decision about a possible partnership to acquire Air Canada.

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