Largest Aimia shareholder says Air Canada group's offer was 'blatantly inadequate'

The largest shareholder in Aeroplan's parent company, Aimia Inc., has applauded the firm's board of directors for not agreeing to sell the Aeroplan point program to a group led by Air Canada.

In an open letter, Christopher Mittleman, the chief investment officer and managing partner at Mittleman Brothers, LLC of New York, said the recent offer from Air Canada and its partners — TD, CIBC and Visa — was  "misleading, coercive, and blatantly inadequate."

"I applaud the board for not acquiescing and continuing negotiations," he said in the five-page letter, which was issued Monday.

"Aeroplan is the lynchpin in the nexus of this powerful network, where TD, CIBC, Visa, Amex, and Air Canada generate hundreds of millions in net profits annually from their Aeroplan card holders," he said.

Mittleman said Aimia should seek an offer of $1 billion, plus a 20 per cent premium. He added that if Aimia can't get that much for Aeroplan, then he'd prefer they not sell the loyalty program.

Mittleman Brothers owns about 17.6 per cent of Aimia. 

On Tuesday, Aimia shares hit an intraday high as $3.98 before slipping back a bit to trade up 1.9 per cent at $3.81. 

Last Friday, Aimia CEO Jeremy Rabe said the company remained open to negotiating with Air Canada   The Air Canada group offered $250 million cash and the assumption of $2 billion of mileage liability, but they later boost their bid to $325 million. Aimia said that was still below the $450 million it believed was fair.

Rabe's comment about negotiating with Air Canada came on the same day that Aimia said it had reached a deal with Porter Airlines to become an Aeroplan partner when Air Canada departs in 2020.

On Tuesday, Aimia said it had also struck agreements with Flair Airlines and Air Transat to also become carrier partners 

Aimia also recently said it was in talks with the Oneworld alliance, which includes British Airways, American Airlines and Cathay Pacific.