Major acquistion expected for Aeroplan, Versant has units at $17
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Investors in Aeroplan Income Fund (AERu/TSX) are driving up the unit price of the former Air Canada frequent flyer program in anticipation of a major acquisition — possibly in South America, according to Neil Linsdell, an analyst at Versant Partners.
“In our opinion, the potential of a sizable acquisition this year is the most likely reason that the units are trading as high as they currently are and could justify further appreciation in the near term,” Mr. Linsdell wrote in a research note.
However, he said he was nevertheless maintaining his “hold” rating and $17 target unless more information about a possible acquisition is provided during a conference call to discuss Aeroplan’s fourth quarter results later this week.
Aeroplan’s units closed at $19.16 on Monday.
Aeroplan’s CEO, Rupert Duchesne, has previously said that Aeroplan will look at acquisitions of other loyalty programs in 2007 and that he prefers bigger acquisitions over smaller ones.