Update: Aimia accepts Air Canada, TD, CIBC & Visa revised $450-million Aeroplan bid
 

Proposal by Air Canada, TD, CIBC and Visa to Acquire Aimia's Aeroplan Loyalty Business

Canada NewsWire

TORONTO, July 25, 2018

Benefits both Aeroplan members and Aimia shareholders

• Allows for smooth transition of Aeroplan members' points to Air Canada's new loyalty program launching in 2020
• Provides value to all Aimia stakeholders and a viable solution to Aimia's current business and financial challenges
• Represents a total purchase price of $2.25 billion, including $250 million in cash and the assumption of approximately $2 billion of Aeroplan points liability
• Proposal implies approximate value of $3.64 per Aimia Inc. common share, a 52.3% 30-day VWAP premium and a 45.6% premium to spot closing price as of July 24, 2018, when added to value of Aimia's other assets 1

Full media release:

https://aircanada.mediaroom.com/inde...03&item=138439

A surprise to be sure but a welcome one.

Fascinating line: "If completed, the Proposed Transaction would result in a positive outcome for Aimia shareholders and Aeroplan members, allowing for a smooth transition of Aeroplan members' points to Air Canada's new loyalty program launching in 2020, safeguarding their points and providing convenience and value for millions of Canadians."

So it doesn't sound like they necessarily want to operate the program, and certainly don't want to use it as the primary AC rewards program, just enable a smoother transition. Huh.

I suspect "smooth transition" equates to "conversion mechanism". Let the speculation begin on a conversion ratio of Aeroplan points to AC points (Altitude?)

Not even a surprise. AC put Aimia in a vice, the latter's value fell, and now AC and the banks move in and get Aeroplan for a song. If it goes through, kudos to Calin for another smart move. He's disposed of all the Milton spinoffs except Jazz/Chorus at a very attractive price to AC shareholders. Call it shark-like predatory actions, but it's business and he will be remembered for doing it particularly well.

Smooth transition means re-integrating the plan into AC's revenue and profit base. It could mean that the points and perhaps even the website get moved over and Aimia itself is dissolved. If I recall correctly, AC already has responsibility for Aimia's unionized staff.

I understand why CIBC and TD are involved, Visa's participation is interesting, because the CIBC and TD Aeroplan cards already were Visa. I'm trying to think how Visa could leverage this, or whether in discussions with Aimia, they felt like the latter was looking at credit card changes that would disadvantage Visa.

Seriously. Would not feel nice to be those who bought in to Aimia close to CAD 20!

Sounds like it was the plan all along. AC directly causes the stock to be lowered and then buys Aimia for cheap. Stockholders will be pissed. Is this even legal?

WOW.....just WOW!

There were many on this board saying AC should just buy AIMIA, but I did not think it would happen....The thought was that AC can start fresh and anew with their own program.

Obviously AC is not doing this out of the goodness of their hearts to help safeguard current AP members points LOL ...from the release "... allowing for a smooth transition of Aeroplan members' points to Air Canada's new loyalty program launching in 2020, safeguarding their points and providing convenience and value for millions of Canadians"

AC has obviously, along with the banks and VISA, seen a way to turn this into money for their shareholders. It would be interestingto see their financial models and their assumptions...

Upon further reading, seem's it's not a buy of AIMIA but a buy of the Aeroplan program itself. Of course, it's not obvious that AIMIA is a going concern afterwards, so it might not be much of a difference...interesting to see how AIMIA responds.

AC is not buying AIMIA. It's buying the Aeroplan loyalty business from Aimia

Also of note in the news release:

"The parties have requested a prompt response from Aimia regarding the proposal, which has an expiry date of August 2, 2018. The Proposed Transaction is subject to the satisfactory conclusion of transaction documents and certain other customary conditions, including due diligence, receipt of customary regulatory approvals and the negotiation and satisfactory completion of credit card agreements between Air Canada and each of TD and CIBC."

Given Visa's involvement too, I wouldn't be surprised if this idea was floated as part of the RFP response for AC's new credit card partner(s).

Remember, this forum has many experts. Many. Like, lots.