Talks off as Aimia rejects $325M bid
Takeover negotiations between Aeroplan operator Aimia Inc. and Air Canada broke off hours before the midnight deadline Thursday.
Aimia said Air Canada and its three financial partners raised their initial bid for its loyalty plan to $325 million, but Aimia wants $450 million. “Aeroplan is committed to protecting our members’ miles,” Aimia CEO Jeremy Rabe said in a statement Thursday.
“It is business as usual for Aeroplan and we expect all of the companies in the current partner consortium to honour their long-standing contractual obligations including issuing and redeeming members’ miles.”
Air Canada said last week
that Toronto-Dominion Bank, Canadian Imperial
Bank of Commerce and Visa Canada wanted to buy the Aeroplan loyalty business to allow customers to transfer their points to its own platform in 2020.
At the time, the group said it offered to pay Aimia $250 million and assume about $2 billion in liabilities, making its offer worth about $2.25 billion.
“Air Canada, TD, CIBC and Visa enhanced the offer and engaged in extensive discussions with Aimia over the past several days to attempt to reach an economically viable agreement,” the airline said in a statement.
“The proposal would have ensured value and continuity for Aeroplan members as well as customers of Air Canada, TD, CIBC and Visa. As previously communicated, it would have also allowed Aeroplan Miles to transfer into Air Canada’s new loyalty program in 2020, providing convenience and value for millions of Canadians.”
The breakdown in negotiations comes after Aimia and the Oneworld airline alliance confirmed earlier in the day that they are in talks about a potential partnership. The Oneworld group, whose 13 members include British Airways, American Airlines and Cathay Pacific, is a competitor to the Star Alliance, of which Air Canada is a member.
Oneworld said it had agreed to explore ways of working with Aeroplan on a partnership that would allow Aeroplan members to earn and redeem rewards on some Oneworld flights, once Aimia’s partnership with Air Canada ends in 2020.
The alliance said Canada represents an important market as seven member airlines fly millions of Canadians every year, but that discussions are at an early stage.
“While Oneworld is excited at the opportunity this may present to all parties concerned, there is no certainty that a deal will be concluded,” the alliance said in a statement.
Aimia declined to elaborate on its strategic talks.
The future of Aeroplan, which has more than five million members, has been in doubt since Air Canada announced in May 2017 that it planned to end a 30-year partnership with Aimia.