(Reuters) - Air Canada (AC.TO) and its partners said on Tuesday that data analytics firm Aimia Inc (AIM.TO) had accepted a cash offer of C$450 million ($344.70 million) for the sale of its Aeroplan loyalty program.
The sale will also include the assumption of about C$1.9 billion worth of Aeroplan’s frequent flier points, the companies said.
In late July, Air Canada, two Canadian banks and other partners including Visa (V.N) offered to buy back the Aeroplan frequent flyer program from Aimia. Air Canada had spun off Aeroplan in 2002.
The deal, if completed, “should produce the best outcome for all stakeholders, including Aeroplan members, as it would allow for a smooth transition to Air Canada’s new loyalty program launching in 2020, safeguarding their miles,” Air Canada Chief Executive Officer Calin Rovinescu said.
Aimia’s largest shareholder Mittleman Brothers said the deal would leave the company with over C$1 billion in cash.
Earlier this month, Mittleman, which holds 17.6 percent stake in Aimia, said Air Canada and its group’s raised cash offer of C$325 million for the loyalty program was cheap. Aimia had suggested C$450 million as a fair price.
The deal is subject to Aimia shareholder approval, among other things.
Air Canada shares rose 7 percent to C$26.47, while that of Aimia rose 10 percent to C$4.22 on the Toronto Stock Exchange.
Reporting by Karan Nagarkatti in Bengaluru; Editing by Shailesh Kuber and Arun Koyyur