AeroMexico Makes An Offer To Buy Aimia’s Stake In PLM Premier

AeroMexico today announced that it had made an offer to purchase Aimia’s stake of 49% in PLM Premier (its loyalty program) for $180 million. Yesterday, Air Canada with banks and Visa made similar offer (read more here) to acquire Aeroplan with liabilities.

AeroMexico

AeroMexico has informed that the current contract between the airline and PLM is not renewed after it expires. The airline plans to bring the loyalty program back in-house. The planned IPO of PLM is no longer in the best interest of the company.

Here’s the press release from AeroMexico:

MEXICO CITY, July 26, 2018 /PRNewswire/ — Grupo Aeromexico S.A.B. de C.V. (“Aeromexico”) (BMV: AEROMEX) today announces offer to acquire Aimia’s stake in PLM.

Grupo Aeromexico (“Aeromexico”) informs that, as a current shareholder of 51.145% of PLM Premier, S.A.P.I. de C.V. (“PLM”), it has made a non-binding proposal for the acquisition of the shares currently held by Aimia Inc (“Aimia”), representing 48.855% on a fully diluted basis, of the outstanding shares of capital stock (the “Stock”) of PLM (the “Proposed Transaction”) for an amount of $180 million US dollars.  This amount, including dividends and marketing fees paid to Aimia since its investment, represents an annualized rate of return for Aimia of approximately 18%.

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 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 Proposed Transaction is subject to the satisfactory conclusion of transaction documents and any necessary regulatory and internal approvals. There are no conditions related to due diligence or financing.

It merits mentioning that Aeromexico has informed Aimia that the current contract between PLM and Grupo Aeromexico (“Aeromexico”), that establishes the basis of operation for the loyalty program Club Premier, will not be extended beyond its current expiration date.

Given the long-term intention of Aeromexico to take full control of its loyalty program, Aeromexico does not consider an IPO of PLM as an acceptable 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.

The Proposed Transaction offer is valid until midnight of August 3, 2018, and Aeromexico is committed to engaging with Aimia’s board to provide all necessary information to facilitate a successful outcome to this process.

Conclusion

Partnerships with both Air Canada and AeroMexico will come to an end even if Aimia doesn’t accept these two offers to acquire respective businesses.

Like I wrote yesterday, it does seem that the outsourcing of loyalty programs have come to an end and programs are bought back in-house. Interesting to see how long the arrangements with GOL/Smiles and LATAM/MultiPlus will last.

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