Aimia: Substantial Issuer Bid for AIM.PR.A, AIM.PR.B, AIM.PR.C, Common

Aimia Inc. has announced:

that its Board of Directors (the “Board”) has approved concurrent but separate substantial issuer bids to repurchase for cancellation (i) up to $62.5 million of its common shares at a fixed price of $4.25 per share, (ii) up to $31.25 million of its Cumulative Rate Reset Preferred Shares, Series 1 (the “Series 1 Preferred Shares”) and its Cumulative Floating Rate Preferred Shares, Series 2 (the “Series 2 Preferred Shares”), each at a fixed price of $17.20 per share, and (iii) up to $31.25 million of its Cumulative Rate Reset Preferred Shares, Series 3 (the “Series 3 Preferred Shares”, and collectively with the Series 1 Preferred Shares and the Series 2 Preferred Shares, the “Preferred Shares”) at a fixed price of $19.00 per share. On November 15, 2019, the last full trading day before the date of this press release, the closing price of the common shares on the Toronto Stock Exchange was $3.63.

Holders of Preferred Shares of record at the close of business on December 24, 2019, will be entitled to receive the dividends declared by the Board on October 28, 2019, regardless of whether such holder deposits Preferred Shares pursuant to the substantial issuer bids with respect to the Preferred Shares (collectively, the “Preferred Share Offers”). Such dividends are payable on December 31, 2019. The purchase prices offered for Preferred Shares pursuant to the Preferred Share Offers take into account and reflect the fact that such dividends will be paid on Preferred Shares. As such, holders of Preferred Shares should take into consideration the total consideration provided to holders of Preferred Shares under the Preferred Share Offers (as well as the dividends payable on December 31, 2019) when comparing to the current trading prices of the Preferred Shares.

  Issuer Bid Offer
Q4 Declared
TSX Closing
Price on
Nov. 15, 2019
Series 1 Preferred Shares $17.2000 $0.2813 $17.4813 $17.73
Series 2 Preferred Shares $17.2000 $0.3395 $17.5395 $18.00
Series 3 Preferred Shares $19.0000 $0.3757 $19.3757 $19.83

If fully taken up, the substantial issuer bids with respect to the common shares (the “Common Share Offer” and, together with the Preferred Share Offers, the “Offers”) would result in the company returning up to a further $125 million to common and preferred shareholders (the “Aggregate Offer Amount”). The Offers are intended to provide all of the company’s shareholders with optionality and a choice regarding liquidity through transactions designed to be accretive and value-enhancing. Further, the Preferred Share Offers, if fully or substantially subscribed, would reduce the company’s cash financing costs associated with preferred share dividend payments and related Part VI.1 tax.

Details of the Offers

Each of the Preferred Share Offers expires on December 27, 2019, at 10:00 p.m. ET and the Common Share Offer expires on December 30, 2019, at 5:00 p.m. ET, unless extended or withdrawn in accordance with applicable securities laws. Any of the Offers may be varied and/or extended independently of the other Offers (including potentially increasing the size of one or more Offers with the goal of affording shareholders the opportunity to receive up to the Aggregate Offer Amount), and none of the Offers is conditional either on any of the other Offers or on any minimum number of shares being tendered.

Based on publicly available information, as of November 15, 2019, Mittleman Investment Management, LLC beneficially owned, directly or indirectly, or exercised control or direction over, 25.1 million common shares, representing approximately 23.1% of the issued and outstanding number of such shares. Mittleman Investment Management, LLC has advised Aimia that it does not currently intend to participate in the Common Share Offer.

Further details of the Offers, including instructions for tendering shares, will be included in the formal offers to purchase and issuer bid circulars, letters of transmittal, notices of guaranteed delivery and other related documents for each of the Offers (with the Preferred Share Offers to be set forth in a single issuer bid circular) (collectively, the “Offer Documents”). The Offer Documents are expected to be mailed to shareholders, filed with the applicable Canadian securities regulatory authorities and made available without charge on SEDAR at, as well as being posted on the Corporation’s website at, on or about November 19, 2019.

Aimia has engaged BMO Capital Markets to act as financial advisor and dealer manager and AST Trust Company (Canada) to act as depositary for the Offers. Any questions or requests for information regarding the Offers may also be directed to the dealer manager or the depositary.

This has become a very strange company. According to their 19Q3 Financials, they have about $572-million in equity financing cash, near-cash and other investments of about $625-million. The shareholders’ equity of $572-million includes about $316-million in total preferred share capital (see the 2018 financial statements, oddly not available on their website, but which are on SEDAR (which, of course, does not want me to link to them either), via a search for “Aimia Inc. Mar 28 2019 07:17:41 ET Audited annual financial statements – English PDF 951 K”)

So that’s pretty good leverage for the common shareholders, provided through the good graces of the preferred shareholders. And completion in full of the common share tranche of this issuer bid will ratchet up the leverage still further, regardless of the degree of preferred shareholder participation.

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