UPDATE 1-Canada's Transat ends takeover talks with Quebec businessman Peladeau

(Adds details from Transat’s statement, background)

June 21 (Reuters) - Struggling Canadian tour operator Transat AT said on Monday it had ended discussions with Quebec businessman Pierre Karl Péladeau over a possible takeover.

Transat engaged with Péladeau after the country’s largest airline, Air Canada, scrapped its merger plans due to stiff concerns raised by European regulators.

Péladeau offered C$5.00 per share in cash for Transat earlier this year, but the company’s stock has surged nearly 60% to C$7.21 since it secured C$700 million ($565 million) in government funding in April.

“Considering the current share price, the price offered no longer provides a reasonable basis to...allow the transaction to proceed,” Transat said on Monday.

Transat has suspended flights due to pandemic restrictions that have battered travel demand and has said it needed at least C$500 million in financing this year.

The company plans to restart its operations and flights on July 30, it said on Monday. ($1 = 1.2390 Canadian dollars) (Reporting by Ankit Ajmera in Bengaluru; Editing by Sriraj Kalluvila)