May 31 (Reuters) - Transat AT Inc's largest shareholder urged the company to not sell itself to Air Canada , and said Transat should not consider any offer until it restores its profitability, the Globe and Mail reported on Friday.
"We don't think this is an opportune time to be selling the company," Peter Letko of Montreal-based investment manager Letko, Brosseau & Associates Inc, told the newspaper in an interview.
Shares of Transat rose 3.1% in early trading, while Air Canada edged down 0.5%.
Earlier this month, Air Canada said here it was in exclusive talks to buy the parent company of leisure carrier Air Transat in an all-cash deal valued at C$520 million.
Air Canada's bid for Transat came days after WestJet received reut.rs/2YSIn8e a C$3.5 billion buyout offer from billionaire Gerry Schwartz's private equity firm Onex Corp.
The Air Canada deal, which has not yet been presented to shareholders, requires approval of two-thirds of Transat investors, the Globe and Mail report said.
Transat, Air Canada and Letko did not immediately respond to Reuters' requests for comment. (Reporting by Arundhati Sarkar in Bengaluru; Editing by Maju Samuel)