CANADIAN COURT SAYS ONEX BID FOR AIR CANADA IS ILLEGAL

   Onex Corp.’s bid to takeover Air Canada is illegal, a Quebec Superior Court Justice rules Friday, because it violates a Canadian law limiting voting stake ownership by a single shareholder to 10 percent, Reuters reported.
   The law, enacted in 1988 when the Canadian parliament privatized Air
Canada, was put in place to keep the airline widely held by the public, Air Canada’s lawyers argued.
   Onex had hoped that, if Air Canada’s shareholders approved its bid, the Canadian government would raise the 10-percent ownership cap. Onex said last week that it would end its hostile takeover bid if it lost the court decision, because the deal was not workable under the 10-percent cap.
   The ruling came the same day that Onex upped its bid for Air Canada to C$17.50 per share from $13 per share. Air Canada rejected the new bid, saying it did not add significant value to Onex’s offer.
   Air Canada’s shareholders were to meet today to formally vote on the
proposal by Onex, which is backed by funds from Dallas-based AMR, parent company of American Airlines.
   Onex planned to acquire Air Canada and merge it with weaker rival
Canadian Air International