Aimia rejects Grupo Aeromexico's $180M US bid for stake in loyalty program PLM

Aimia Inc. has rejected an offer from Mexican Airline operator Grupo Aeromexico to buy its stake in their joint loyalty program PLM for $180 million US.

The offer from Grupo Aeromexico would have given the Mexican company 100 per cent control of Premier Loyalty & Marketing, which owns their joint Club Premier frequent flyer program.

Aeromexico currently owns 51.1 per cent of PLM and said the bid for Aimia's 48.9 per cent stake expires at midnight on Aug. 3, but such deadlines are often amended.

Aimia said it promptly rejected the bid "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 that PLM generated adjusted operating income of $77.4 million US in 2017.

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.

The offer comes one day after a group led by Air Canada offered to buy Aimia's loyalty business Aeroplan in a deal valued at $2.25 billion, including points liabilities they would assume.

Air Canada told its clients that the proposed transaction, which expires Aug. 2, would allow customers to transfer their points to the airline's own loyalty program when it launches in 2020.

'Playing hardball'

Grupo Aeromexico said Thursday that the $180 million US price tag, including dividends and marketing fees paid to Aimia since its investment, represents an annualized rate of return for the Montreal-based company of approximately 18 per cent. The group also said launching an initial public offering of PLM is not an option.

"For this reason it is Aeromexico's view that the best long-term solution for all stakeholders is for Aeromexico to acquire the equity stake currently held by Aimia," it said in a statement.

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."