Author Topic: AIM.TO - Aimia  (Read 83371 times)

Cigarbutt

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Re: AIM.TO - Aimia
« Reply #260 on: April 11, 2018, 08:10:15 PM »
From the article:
"On August 25th, Aimia announced the sale of its Air Miles Trademarks for total consideration of $53,750,000 (before up to $13,750,000 of future payments). This represented a sale price of approximately 7 times current pre-tax cash flow, at a time when well-known trademarks often transact at approximately two to three times this multiple."

I don't think that is a reasonable assessment. From what I know of this market and of of Diversified Royalty Corp (DIV), the purchase price was perhaps 10 to 25% lower than comparable transactions, reflecting distress at Aimia.

Anecdotal, but I've met a few Aeroplan frequent flyers lately. I understand that 1-they plan to use their points for AC flights and see 2020 as a clear deadline (ie aim to have points at zero then), 2-find very little value elsewhere in the redemption offers but 3-are relatively hopeful that Aimia will come up with alternatives to the Air Canada option and are still planning to accumulate points once that happens.

The annual meeting happens soon and there will be Boardroom changes. I understand Mr. Micheal Fortier is leaving. I see this as a negative because he is somebody I respect (competence and integrity).



bathtime

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Re: AIM.TO - Aimia
« Reply #261 on: April 12, 2018, 05:24:07 PM »
Mittleman continue to increase their stake, now at 16%+, and now have 3 board positions which happened following this article:

http://business.financialpost.com/news/fp-street/u-s-shareholders-look-to-bust-some-heads-at-aimia-meeting






Cigarbutt

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Re: AIM.TO - Aimia
« Reply #262 on: April 13, 2018, 01:37:48 PM »
I thought the following was interesting:
https://seekingalpha.com/article/4162810-mittleman-investment-management-1q18-commentary

The investment thesis primarily depends if you can think Aimia can renew its redemption offers.
IMO, the renewed option will disappoint.

However, from reading the above, learned two things:
1-will know more about the game plan on April 26th.
2-some assets (with real value) are apparently legally separated in a different shell and that is very interesting from the preferred point of view.

"Another key facet of our investment thesis with Aimia is that there is plenty of value in other Aimia holdings to protect us should Aeroplan not survive. That subsidiary, Aimia Canada Inc., is distinct from the holding company, Aimia Inc., so liabilities from that segment shouldn't destroy the value of the other assets held by the holding company, assets which include, for example, its 49% ownership of PLM Premier (5.3M member, fast growing coalition loyalty program anchored by Aeromexico, Mexico's flagship airline)."

...

"Even if Aeroplan were to implode on a tidal wave of redemptions due to the fear that Air Canada flight options would not be replaced by comparable seats on other airlines flying similar routes, then the other assets Aimia owns appear to be worth no less than US$1.60 (C$2.00), net of debt and preferred stock, which is 19% higher than the current price of US$1.34."

Will try to look into this as I understood that the redemption liability could negate the value of remaining assets in a liquidation scenario.

gokou3

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Re: AIM.TO - Aimia
« Reply #263 on: April 13, 2018, 04:05:15 PM »
Another fund wanting against the current board:

22NW Fund Issues Statement Against the Re-Election of Aimia Board of Directors
https://web.tmxmoney.com/article.php?newsid=6270142716812319&qm_symbol=AIM

Quote
22NW owns approximately 4.3 million shares, or about 3%, of Aimia.

...we note that the Company has adopted a Majority Voting Policy pursuant to which any director nominee receiving fewer than 50% of votes cast "for" his or her election at the AGM is required to immediately tender his or her resignation."


Cigarbutt

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Re: AIM.TO - Aimia
« Reply #264 on: April 27, 2018, 04:50:48 AM »
Q1:
Numbers for the core Aeroplan coalition program:

Accumulation activity (YoY variance, %):  2017    Q1:5,4   Q2:1,2   Q3:2,0   Q4:(0,9)      2018     Q1:(2,8)
Redemption activity   (YoY variance, %):  2017    Q1:3,9   Q2:1,8   Q3:4,7   Q4:9,9         2018     Q1:9,6

The burn/earn ratio was at 109% in Q1. They expect moderation of that trend but redemption pressure is likely to persist.
PLM continues to perform well.

New CEO to come and evolving business model. The most likely scenario is to carry on until the 2020 transition.

Seen as a going concern, there is some potential value for the common share although I still think that, post 2020, the preferred will be the fulcrum security.

The problem I see at this point is the fact that preferred shareholders have a passive role and I can't clearly see how the preferred price may effectively relate to its share of the enterprise value as there are no dividends in sight and as the risk profile will tend to remain elevated during the transformation. The bank debt will continue to put pressure on cash flows as leverage is expected to come down and entities that are forcing change are common shareholders.

Preferred shares may come to be seen as cheap leverage with dividends that simply accrue.
The whole process may take a while and one has to discount the eventual value that may be realized.

KCLarkin

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Cigarbutt

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Re: AIM.TO - Aimia
« Reply #266 on: June 13, 2018, 04:14:34 PM »
Thanks for the link.

In the evolving crowded Canadian loyalty market:
-WestJet and RBC team up to increase market share.
-Air Canada (IMO unlikely to team again with Aimia) values (NPV) its own loyalty program at 2 to 2,5 billion$.
-Air Miles continues to consolidate its market share at the plain vanilla loyalty level.

What is left for Aimia?

vikx01

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Re: AIM.TO - Aimia
« Reply #267 on: July 25, 2018, 05:28:53 AM »
Air Canada, TD, CIBC, Visa offer to buy Aimia’s Aeroplan in $2.25B deal
https://www.bnnbloomberg.ca/air-canada-td-cibc-visa-offer-to-buy-aimia-s-aeroplan-in-2-25b-deal-1.1113562

petec

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Re: AIM.TO - Aimia
« Reply #268 on: July 25, 2018, 06:26:13 AM »
I always felt an AC buy was a distinct possibility - I'm just amazed it's legal. Isn't there a risk that someone sues them for cutting the contract and then buying the company? I guess not since the contract was expiring but it amazes me.

Cardboard

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Re: AIM.TO - Aimia
« Reply #269 on: July 25, 2018, 07:10:30 AM »
To me it shows how incompetent Air Canada truly is: spend money on creating your own plan, erode the existing brand, create significant uncertainty around it and then buy it out...

Maybe that they saved some money doing it this way instead of a properly negotiated sale but, I believe that the costs and lost credibility outweigh these benefits.

Cardboard