Grupo Aeromexico makes $180M US bid for Aimia’s stake in loyalty program PLM

Mexican Airline operator Grupo Aeromexico has made a non-binding proposal to acquire Aimia Inc.’s stake in their joint loyalty program PLM for $180 million US.

The proposed transaction would give the Mexican aviation company full control of Premier Loyalty & Marketing (PLM), which owns their joint Club Premier frequent flyer program.

“If completed, the Proposed Transaction would result in a positive outcome for Aimia’s shareholders as it provides an opportunity to realize an immediate return on the disposal of an asset, the divestiture of which would have otherwise been challenging,” the group said in a statement. “The Proposed Transaction would also provide benefits to Aimia’s stakeholders as it would provide material financial resources which Aimia can use to strengthen its core business.”

The group currently owns 51.1 per cent of PLM and says the offer for Aimia’s 48.9 per cent stake expires at midnight on Aug. 3, but such deadlines are often amended.

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.

Aimia was not immediately available for comment.

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.”

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