Merrill Lynch Raises Stake in Air Canada Parent ACE

Merrill Lynch & Co.'s Canadian unit said it bought 2.95 million Class B shares in ACE Aviation Holdings Inc. (ACE/H), the parent of Air Canada, for a stake of about 3.8 percent in the Montreal-based company.

The New York-based securities firm made the buy yesterday on the Toronto Stock Exchange (SPTSX), giving it 17 percent of Class B shares, according to a statement distributed by Canada NewsWire today. Merrill Lynch previously owned about 4 percent of the class's shares. The purchase was valued at about C$79.3 million ($74 million), based on yesterday's closing price.

The share purchase was made in the ``ordinary course of its trading operations,'' Merrill Lynch said. Brokerage spokeswoman Danielle Robinson and ACE Aviation spokesman Peter Fitzpatrick declined to comment.

ACE had 102.3 million shares outstanding at the end of 2006, including 79.5 million Class A variable voting shares and 22.8 million Class B voting shares, which can only be held by Canadian citizens.

The Class B shares fell 4 cents to C$26.86 at 4:10 p.m. on the Toronto exchange.

To contact the reporters responsible for this story: David Scanlan at dscanlan@bloomberg.net; Hugo Miller in Toronto at hugomiller@bloomberg.net

To contact the editor responsible for this story: Dave Versical at dversical@bloomberg.net

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