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Aim.to (Aeroplan)

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And not to thread spam but Aimia just declined the Aeromexico offer stating that they get almost $80 million in dividend payments yearly till 2030
"The Company has promptly rejected the offer as it believes that its stake in PLM is worth significantly more than the offer price, which reflected no improvement whatsoever to the terms previously proposed by Aeromexico to Aimia in prior discussions between the parties," Aimia said in a statement Thursday.

Aimia noted that PLM generated adjusted earnings before interest, taxes, depreciation and amortization of US$77.4-million in 2017, and the contract between the two parties runs until 2030.
Pretty strong GFY reply from Aimia, 1 down and 1 to go. At least management knows a bad deal when they see one.

*Edit* stock price is up ¢10 since the rejection on almost half a million shares traded. Overall 3 million shares traded today, up 3.25%
Last edited by kr0zet on Jul 26th, 2018 2:13 pm, edited 1 time in total.
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kr0zet wrote: And not to thread spam but Aimia just declined the Aeromexico offer stating that they get almost $80 million in dividend payments yearly till 2030

Pretty strong GFY reply from Aimia, 1 down and 1 to go. At least management knows a bad deal when they see one.
That is significant. AIM sees an opportunistic move and called it out.

As for the AC offer, well AC is the only company that can use the value of aeropeso. ae also knows that, and there is little likelihood of a competing offer.

The redemption rate has not changed much, but the seat availability had also gone done a lot in the last year. So the redemption rate not going up a lot, doesn't mean there wasn't higher attempt to redeem. We have tried to redeem and did find the availability lacking and frustrating. That may turn into an outcry in late 2019 or early 2020. The new AIM board and the plan for ae 2.0, was significant, and may have caught AC by surprise. AC now feels a bid to get the ae infrustructure and database, can be of good value.

Very interesting. If AIM asks for an extension on Aug. 2, then release good financials on Aug. 3, it gives them a stronger hand to ask for more. So there may still be day trading opportunities in the next few days.
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Cavegirl wrote: As for the AC offer, well AC is the only company that can use the value of aeropeso. ae also knows that, and there is little likelihood of a competing offer.
This is untrue. Aeroplan 2.0 has shown that there can be a viable alternative to this. As Aimia has the data to know which routes are the most popular can you imagine the disruptive waves caused by a daily direct Toronto to UK or France route charterd by an Aeroplan plane? Or a Montreal to US major airline hub city daily flight where you could use points to fly and then transfer to a partner airline with points and no scamcharges like AC puts on points flights? Aimia doesn't have to do this, they just have to threaten to do this...
Cavegirl wrote: The redemption rate has not changed much, but the seat availability had also gone done a lot in the last year. So the redemption rate not going up a lot, doesn't mean there wasn't higher attempt to redeem. We have tried to redeem and did find the availability lacking and frustrating. That may turn into an outcry in late 2019 or early 2020.
**Edited to remove inaccurate information. **
Cavegirl wrote: The new AIM board and the plan for ae 2.0, was significant, and may have caught AC by surprise. AC now feels a bid to get the ae infrustructure and database, can be of good value.
You are right, I believe they were not ready for this and thought an in-house rewards program would not be that hard. I believe that they hired for the new program, started work and realized quickly it was an uphill battle. I believe they talked with potential partners; especially when they were seeking credit card backers and CIBC in particular is having a TOUGH go with thier in house rewards program. I believe they went back to talk with the old board of Aimia and we're working out a deal with them and got blindsided by the new board and Aeroplan 2.0 so they made a very public offer with a tiny window of acceptance. But this is all speculation. :)
Last edited by kr0zet on Aug 6th, 2018 1:50 pm, edited 1 time in total.
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AC is the one that can get best value out of aeropeso. Other companies cannot.

If you read around, there are many people really unhappy in the last year, with the reduced availability of redemption flights. The contract used to be 8% of seats on a flight. That changed to 8% on the "route", which is drastically different. Recently AC is not even releasing seats on a lot of flights, or seats only on bad-time (red eye) or bad-connections.

Similar redemption rate is not the same as similar attempts to get redemption seats. Big difference.

It's not unusual for a company in this situation to ask for extension to decide, especially in this case a very short time till Aug. 2. So it'll be interesting to see AIM's response to this.
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^ No wonder I got screwed trying to fly multi-cities a few weeks ago. Options were much better Summer of 2017 for the same travel segments though I did redeem for the flight much later this year.

Surprised AIM couldn't sue Air Canada for these changes.
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Don't know what this says about the common stock but the prefs are at a 3 year high! That predates the AC announcement, the dividend cut, the nectar debacle...
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Random thoughts for an interesting weekend...

Over the last 2 months Middleman has purchased just shy of $700,000 shares on the common market.

RBC revised their price target since the AC announcement for Aimia giving it a rating of Sector Perform and a target of $5.00
National Bank revised their target since the AC announcement with a rating of Sector Outperform and a target of $4.30
TD Revised their target 2 days before the AC announcement from $2.25 to $2.50

Want to know what CIBC and TD have to do with this offer? From Aimia's last quarterly report, almost 10% of all credit card spending done by Canadian's last year were on Aeroplan branded cards. I still stand by the fact that the shopping patterns are relatively fixed for Canadians and with 5 million active members with an average account age of 10 years the bulk of these members are not going anywhere.

Know how many seats Aeroplan purchased from Air Canada last year? Close to 2 million. That represents 5% of total traffic on Air Canada's network.

Have a good weekend all.
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On Fri. AC's boss said their offer for AIM is extremely generous. The largest shareholder of AIM, Mittleman said it's worth 4 times as much as what AC is offering ($250M plus assume debt).

AC said it's not abandoning their own strategy of building their own loyalty program, and no other bidders will want to assume the debt of ae. Of course AC has to say that, even if AC will just use ae for its "new" loyalty program, otherwise AIM will just ask for more knowing AC has no choice. So there is bluffing games on both sides.

AIM must feel betrayed, but the new management did announce steps toward ae 2.0, which caught AC by surprise, thus this offer. If AIM asks for extension, and/or ask for more, they are now in a stronger position than before, with a public plan and redemption rate similar to what they had before. But if this deal fall through, all parties will be hurt, all will lose customers, and all can bleed before the eventual messy divorce date of June 2020.
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kr0zet wrote: Over the last 2 months Middleman has purchased just shy of $700,000 shares on the common market.
Where are you seeing this? Before Mittleman joined the board, AIM was putting out monthly reports advising of MB's increased position. That last one was on May 2. I haven't seen anything since on SEDAR.

This question isn't specific to AIM but applies as well. When someone joins a board, they are beholden to blackout periods correct? Would this be why I haven't seen a new monthly report on SEDAR? Or did MB simply stop increasing the position?
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magmadragon wrote: Where are you seeing this? Before Mittleman joined the board, AIM was putting out monthly reports advising of MB's increased position. That last one was on May 2. I haven't seen anything since on SEDAR.

This question isn't specific to AIM but applies as well. When someone joins a board, they are beholden to blackout periods correct? Would this be why I haven't seen a new monthly report on SEDAR? Or did MB simply stop increasing the position?
https://www.marketbeat.com/stocks/TSE/A ... er-trades/

it is listing the follow as Mittleman's recent transactions:

7/25/2018 Mittleman Investment Managemen Insider Sell 17,100 C$2.68 C$45,828.00
7/19/2018 Mittleman Investment Managemen Insider Sell 5,500 C$1.77 C$9,735.00
7/10/2018 Mittleman Investment Managemen Insider Sell 325 C$1.82 C$591.50
6/20/2018 Mittleman Investment Managemen Insider Buy 910 C$1.70 C$1,547.00
6/14/2018 Mittleman Investment Managemen Insider Buy 295,800 C$2.45 C$724,710.00
6/12/2018 Mittleman Investment Managemen Insider Buy 12,200 C$1.96 C$23,912.00
5/24/2018 Mittleman Investment Managemen Insider Sell 11,500 C$1.69 C$19,435.00
5/7/2018 Mittleman Investment Managemen Insider Buy 32,200 C$1.56 C$50,232.00
5/3/2018 Mittleman Investment Managemen Insider Buy 27,000 C$1.57 C$42,390.00
5/1/2018 Mittleman Investment Managemen Insider Buy 60,000 C$1.63 C$97,800.00

Would an employee of Mittleman have to declare purchasing if they are not on the board of Aimia?
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kr0zet wrote: it is listing the follow as Mittleman's recent transactions:

Would an employee of Mittleman have to declare purchasing if they are not on the board of Aimia?
That's good to know, thank you.

I would think that Aimia would have to disclose anytime a major shareholder does moves like this. My understanding was that that is the point of the Alternative Monthly Report. But perhaps I'm mistaken.
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I'm trying to understand something here ; If AIMIA sells, given they're not selling the company just aeroplan; What happens to the stock price ? Sure Aimia get a bunch of cash in hand and removes just about all their liabilities. But there is no business left (no revenue generation) less the PLM stake and a few other non-noteworthy items.

Wouldn't the stock price tank at that point ?
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taal wrote: I'm trying to understand something here ; If AIMIA sells, given they're not selling the company just aeroplan; What happens to the stock price ? Sure Aimia get a bunch of cash in hand and removes just about all their liabilities. But there is no business left (no revenue generation) less the PLM stake and a few other non-noteworthy items.

Wouldn't the stock price tank at that point ?
Usually companies will issue a special dividend when they sell a large portion of the company, so the stock price may be adjusted for that, but you are getting a cash payout for the difference. Whether the stock actually tanks or not will depend on what plans the company has for the money.
Tons of things for sale!
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I sold AIM for a nice profit at $3.63 at the break of news of AC bidding for ae. Just bought a chunk at $3.46 today. Hope it jumps again tomorrow.

AE talking with Oneworld !!!

Bobby Yip/Reuters

Aeroplan’s parent company, Aimia Inc., is in partnership talks with the Oneworld airline alliance as it fends off a hostile takeover bid from Air Canada and three financial partners.The talks, which Aimia confirmed on Wednesday, extend the company’s efforts to reposition Aeroplan once its contract with Air Canada expires in 2020.Under new leadership, the loyalty program has recently promised not to change the cost of booking flights for members once the Air Canada contract ends. It has also publicly stated members will be able to book seats on any airline come 2020.

Behind the scenes, Aimia has also been negotiating a new partnership with the Oneworld alliance, whose member airlines include British Airways, American Airlines and Cathay Pacific. Oneworld is a direct competitor to Star Alliance, of which Air Canada is a member.“I can confirm that we are in discussions with Oneworld as a potential preferred airline partner,” an Aimia spokesperson wrote in an e-mail to The Globe and Mail.The negotiations are continuing and may not result in a partnership. However, their revelation casts a new light on the takeover bid led by Air Canada – which expires on Thursday.

Last week, the airline teamed up with Toronto-Dominion Bank, Canadian Imperial Bank of Commerce and Visa Canada Corp. on an offer to purchase the Aeroplan program for $250-million in cash. Air Canada and its partners would also assume a $2-billion outstanding liability on Aimia’s books for loyalty points that have not yet been redeemed. Aimia currently has $300-million in cash reserved to cover these liabilities.The bid comes a year after Air Canada unveiled plans to launch its own loyalty program, prompting shares in Aimia to plummet 63 per cent in a single day.When announcing the offer, Air Canada and its partners gave Aimia eight days to reply. It was unclear why they provided such a tight window.

When Air Canada reported earnings last Friday, chief executive Calin Rovinescu said the bid has such a short time frame because the airline will need to refocus on building its own in-house program if it is rejected.However, in a question-and-answer section of its website, Air Canada has stated that it became aware of talks between Aimia and others – but wouldn’t specify which discussions they were. “There have been other proposed transactions to purchase Aimia over the past several months,” the website reads.Last week, a day after the consortium’s bid became public, Aeromexico announced its own hostile offer to purchase Aimia’s stake in a Mexican loyalty-rewards program. Although it was not a bid for the whole company, it is possible Air Canada became aware of Aeromexico’s interest.

Air Canada has reason to fear a partnership with Oneworld. For decades, the airline has counted on a steady stream of customers from the Aeroplan partnership to fill its seats, and while Air Canada decided to build its own loyalty program, Aeroplan members would still book a sizable number of its seats, assuming they would be able to book seats on any airline.Yet, if Aimia signs a new preferred partnership with Oneworld, it would have financial incentives to promote travel on the alliance’s airlines – which could siphon customers from Air Canada.

The revelation of talks with Oneworld also indicates Aimia is developing a strong business plan under new CEO Jeremy Rabe – something that would threaten an Air Canada in-house loyalty program.For the first year after the airline announced its breakup from Aeroplan in May, 2017, Aimia spent most of its time putting out fires, including cutting its dividend and selling a loyalty business it owned in Britain.However, after 12 months with little progress on a business strategy, Aimia replaced its CEO in late May; Mr. Rabe has a history in the loyalty-rewards market. In the three months since, Aeroplan has quickly revamped. Air Canada declined to comment for this story. Oneworld could not be reached for comment.
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Aimia in talks with Oneworld Airline Alliance
Aeroplan’s parent company, Aimia Inc., is currently in partnership talks with the Oneworld airline alliance as it fends off a recent hostile takeover bid from Air Canada and three financial partners.

The talks, which Aimia confirmed Wednesday, extend the company’s efforts to re-position Aeroplan once its contract with Air Canada expires in 2020. Under new leadership, the loyalty program has recently committed to keeping its existing redemption grid once the Air Canada contract ends, so that members will not pay more for flights, and it has publicly stated it will allow members to book seats on any airline come 2020.

Behind the scenes, Aimia has also been negotiating a new partnership with the Oneworld alliance, whose member airlines include British Airways, American Airlines and Cathay Pacific. Oneworld is a direct competitor to Star Alliance, of which Air Canada is a member. The revelation that Aimia is in talks with Oneworld casts new light on the takeover bid led by Air Canada.


“I can confirm that we are in discussions with Oneworld as a potential preferred airline partner,” an Aimia spokesperson wrote in an e-mail to The Globe and Mail.

Last week, Air Canada teamed up with Toronto-Dominion Bank, Canadian Imperial Bank of Commerce and Visa Canada Corp. on a bid to purchase the Aeroplan program for $250-million in cash. Air Canada and its partners would also assume a $2-billion outstanding liability on Aimia’s books for loyalty points that have not yet been redeemed. Aimia currently has $300-million in cash reserved to cover these liabilities.


The bid comes a year after Air Canada unveiled plans to launch its own loyalty program, prompting shares in Aimia to plummet 63 per cent in a single day.

The bidding consortium gave Aimia a week to respond to their offer, which expires Aug. 2.

Last Friday, Air Canada chief executive Calin Rovinescu said the bid has such a limited time frame because the airline will need to re-focus on building its own in-house program if it is rejected.

However, in a question-and-answer section of its website, Air Canada has also stated that it became aware of talks between Aimia and others – but wouldn’t specify which discussions. “There have been other proposed transactions to purchase Aimia over the past several months,” the website reads.

Last week, Aeromexico announced its own hostile bid to buy Aimia’s stake in a Mexican loyalty rewards program – an offer Aimia quickly shot down. While it was not a bid for the whole company, it is possible Air Canada became aware of it.


A partnership with Oneworld may be another example of negotiations that Air Canada feared.

Air Canada and Oneworld did not immediately return requests for comment.
Hummmmm............... Tomorrow is the deadline that Air Canada set, quarterly report the next day... The next 2 days are going to be interesting....

*Edit*. Missed it by that much... LOL
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charliebrown wrote: So there's a higher offer now? Not sure i understand Aimia's press release

https://www.newswire.ca/news-releases/u ... 38021.html
The way I read it is that AC upped their offer to $325 million cash and Aimia said that $450 plus provisions is what they would accept? But as of now there is nothing more to report. Wonder what will happen tomorrow now that the announcement of the talks with Oneworld and we should see a great quarter pre-open...

I believe that puts Middleman at a valuation of $3 / share for Aeroplan? $450m / 152m shares outstanding = $3 a share... But who knows what the amended provisions they are looking at refers too.
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It won't be surprising to see a deal at some middle points between $325M and $450M.

For ae to be so bold and break off negotiation, they must hold some strong enough cards. A great quarterly report coming up. An announced plan for ae 2.0 with redemption rates staying the same for most flights and 20 airline partners. Talks with Oneworld/AA. Possibly talks with others.

AC is afraid of losing customers and valuable database info to competitors. AC is probably finding issues in their building of loyalty program.

ae isn't afraid to continue on their current planned path now. AC is the one having more to lose if ae partners with AC's competitors. So the middle point may go closer to ae's ask. Hey I just bought another chunk of ae, so hopefully AIM goes up more.
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kr0zet wrote: I'll agree that you will switch. I'd argue that the majority of Canadians will not. Savvy shoppers are not the majority of the population. How many people have land lines and pay bell an absurd amount of money while also having cell phones, just in case... How many people have stupidly expensive cable/satellite packages while having Netflix or Prime Video and an internet connection, because it's easier...

The problem with booking on air Canada with aeroplan points are the rediculous fees that air Canada straps on. Book with a different airline and the fees shrink considerably. Aeroplans problem is a lack of a domestic partner, not an international one. I still think any loss to access of star alliance would be made up with access to SkyTeam. It only leaves the domestic business traveler without a seat so to speak.

At that point porter could be an option especially with it's upscale branding. Porter's problem is one of Western Canada.... They cover Ontario and Eastward easily. Now your down to a problem of winnipeg, calgary, edmonton, victoria and vancouver. Not ideal but better than nothing.

I love how everyone is forgetting that Aeroplan is bringing $700 million in buying power to the party.
I frigging called it! Posted that July 8th of last year!

So I wonder if the chartered flights are going to be Toronto --> Vancouver, Toronto --> Calgary, Toronto --> Winnipeg? Maybe Porter expands on the back of this deal? WestJet should be concerned!

Aimia announces partnership with Porter

I was wrong about the international partner though, thought SkyTeam through AeroMexico relationship Turns out it was Oneworld instead.

And there doesn't seem to be anything screaming 'SELL' in the quarterly report either...

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