"If Aimia can not obtain at least the stand-alone value of Aeroplan, $1 billion, plus a modest control premium of 20 per cent, then I'd prefer Aimia not sell it", said Mittleman's Chief Investment Officer Christopher Mittleman, in a statement. Christopher Mittleman, chief investment officer of New York-based Mittleman Brothers LLC, called the offer "coercive" and "blatantly inadequate" in an open letter to Aimia's board.
In an open letter, Christopher Mittleman, the chief investment officer and managing partner at Mittleman Brothers, LLC of NY, said the recent offer from Air Canada and its partners - TD, CIBC and Visa - was "misleading, coercive, and blatantly inadequate". "Thus, a compromise between what it's worth to Aimia, at certainly no less than $1-billion, and what it's worth to the consortium, at $2-billion-plus, seems reasonable".
Porter's agreement with Aimia includes the availability of up to 60 percent of the airline's seat inventory for purchase with Aeroplan Miles at fixed-rate prices.
"Our current VIPorter members will benefit from Aeroplan's enhanced range of loyalty services, with an ability to earn and redeem points with a growing network of airlines and other brands".
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. Last week, Aeroplan also touted the potential for an arrangement with the Oneworld airline alliance, whose members include British Airways, American Airlines and Cathay Pacific. The bidders tried to add this amount to the offer price, claiming their original bid was worth $2.25-billion.
"Our Air Miles program operates the same way today. They will also be able to redeem their Aeroplan miles for our products".
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Where this leaves Air Canada is unclear.
Aimia now has about $530-million in cash to cover the liability.
Aeroplan, Canada's premier travel loyalty program, is owned by Aimia Inc., a data-driven marketing and loyalty analytics company.
One analyst recently estimated TD and CIBC now make more than $400-million combined annually from the Aeroplan program, through issuing Aeroplan credit cards.
Mittleman Brothers owns about 17.6 per cent of Aimia.
If true, it has implications for the bidding consortium's next move. Even compared to its peers, Air Canada remains uber-cheap, leading investors like myself to continue to beat the drum that valuation expansion is likely to be the key driver of Air Canada's long-term growth story.