An industry analyst says Air Canada needs to “materially raise” its $250 million cash offer to purchase Aimia Inc.’s Aeroplan loyalty program.
Adam Shine of National Bank Financial wrote in a report Monday that last week’s offer isn’t enough to support the current stock price of around $3.50 given the costs associated with a wind-down of Aimia.
The share price of Aeroplan parent company Aimia has surged 40 per cent since the country’s largest carrier made an offer that included cash and acceptance of the loyalty program’s $2 billion unfunded liability for miles issued.
However, they are about 60 per cent below the $8.93 they traded at before Air Canada announced last May that it wouldn’t renew its 30-year exclusive partnership in 2020.
Shine says he doesn’t think Aimia will completely reject the proposal by Air Canada’s Thursday deadline.
Airline CEO Calin Rovinescu last Friday described the offer as “extremely generous,” adding the consortium which includes TD, CIBC and Visa is likely the only buyer willing to take on the liability.