TORONTO — With yesterday’s news that a new consortium led by Air Canada has put forth a proposal to buy Aeroplan, parent company Aimia Inc. has confirmed receipt, saying that it will now consider the proposal with its advisors.
Aimia has received the conditional proposal from the consortium, which consists of Air Canada, The Toronto-Dominion Bank, Canadian Imperial Bank of Commerce and VISA Canada Corporation, to acquire the Aeroplan loyalty program business. This public proposal follows prior private engagement and discussions between Aimia and the consortium.
Aimia’s Board of Directors had formed a special committee of independent directors some time ago, which will now consider the proposal in consultation with its legal and financial advisors to determine whether it’s in the best interests of shareholders and the company as a whole. It will than make appropriate recommendations to the Board of Directors.
Given the nature of the proposal, Aimia’s shareholders have been advised not to take any action with respect to the proposal at this time. Aimia will provide updates “if and when necessary” in accordance with applicable securities laws.
The consortium has given Aimia a deadline of Aug. 2 to respond. The proposal includes $2 billion of Aeroplan points liability as of March 31, 2018 for $250 million in cash, representing a total purchase price of $2.25 billion.
Aimia is also fielding a proposal from Mexican Airline operator Grupo Aeromexico, which has made a non-binding proposal to acquire Aimia’s stake in its joint loyalty program for US$180 million, just one day after the Air Canada offer was announced.
The proposed transaction would give the Mexican aviation company full control of Premier Loyalty & Marketing (PLM), which owns its joint Club Premier frequent flyer program.
“If completed, the proposed transaction would result in a positive outcome for Aimia’s shareholders as it provides an opportunity to realize an immediate return on the disposal of an asset, the divestiture of which would have otherwise been challenging,” the group said in a statement. “The proposed transaction would also provide benefits to Aimia’s stakeholders as it would provide material financial resources which Aimia can use to strengthen its core business.”
The group currently owns 51.1% of PLM and says the offer for Aimia’s 48.9% stake expires at midnight on Aug. 3, but such deadlines are often amended.
Club Premier has more than 3.7 million members and more than 100 partners, according to Aimia’s website.
Grupo Aeromexico, which also operates its namesake airline, says it has informed Aimia that its current contract will not be extended beyond its current expiration date in 2030.
Aimia was not immediately available for comment.
Grupo Aeromexico is “playing hardball”, said Adam Shine, an analyst with National Bank in a note to clients. “If it wasn’t obvious yesterday, it’s increasingly clear today that Aimia is being pushed into selling off its pieces by larger partners who always had a stronger bargaining position in these assorted relationships.”
With file from The Canadian Press
