- Mithaq's All-Cash Takeover Bid for Aimia of $3.66 per Common Share Is the Best Option for
Shareholders, Representing a Compelling Premium of
Approximately 20% to Pre-Bid Trading Price on the TSX
- Mithaq's regulatory application to cease trade Aimia's
recent dilutive private placement is expected to be heard before
year end
- Shareholders Should Continue to Visit
www.cashpremiumforaimia.com for Latest Updates
TORONTO, Oct. 23,
2023 /CNW/ - Mithaq Canada Inc. (the
"Offeror"), a wholly-owned subsidiary of Mithaq Capital SPC
("Mithaq"), the largest shareholder of Aimia Inc. (TSX: AIM)
("Aimia" or "the Company"), today urged Aimia
shareholders to disregard the self-serving decision by Aimia's
board to reject Mithaq's compelling all-cash premium bid for the
Company, which only serves to showcase the board's determination to
protect its own jobs rather than do what is best for
shareholders.
"The Aimia board's recent decision to sell discounted shares to
a board-friendly group demonstrates extreme board entrenchment, a
breach of directors' fiduciary duties, and contempt by the board
and management for the Company's shareholders," said Mr. Turki
Saleh AlRajhi, Chairman and CEO of
the Offeror. "Shareholders need to ask why this preferential deal
was only made available to a select group of nine investors. The
board cannot credibly say that selling control and board seats at a
significant discount of $3.10 per
share is in the best interest of the Company, then only days later
turn around and argue that $3.66 a
share in cash for all shareholders is too low."
Mr. AlRajhi concluded: "Aimia's board and management are not
entitled to make self-serving decisions at the expense of all
shareholders' best interests and to unlimited use of shareholder
resources in an effort to maintain themselves as directors. All
fellow shareholders deserve better and are right to question the
motives of Aimia's leadership. There's an obvious disconnect
between the board's words and its actions."
The board's recommendation to shareholders is flawed for a
number of reasons, including:
- Selling shares at $3.10, with
warrants exercisable at $3.70 and
expiring in five years, gives a significant discount to preferred
investors, especially when the value of the warrants is taken into
account, and implies that the board does not expect the share price
to increase meaningfully in the near future. This is inconsistent
with a board that is truly seeking to maximize value;
- The board argues that the $3.66
all-cash premium offer is opportunistic because Aimia's stock is
trading near its lowest in the last three years but at the same
time agreed to sell control to its board-friendly group of
investors at a lower discounted price of $3.10 per share. The directors' circular reveals
they were desperately prepared to sell for less than $3.10 in the days leading up to Mithaq's
offer;
- The dilutive private placement is clearly a defensive tactic.
The search for board-friendly investors to dilute Mithaq's position
only commenced after Mithaq's "no vote" campaign and its public
disclosure that it was exploring board change and a potential
takeover bid. Notably, financial advisors were retained and "robust
negotiations" commenced after Mithaq increased its stake from 19.9%
to 30.96%;
- The board does not provide in its circular any detail to back
up its contention that it is seeking and assessing value-enhancing
opportunities;
- Aimia's assertion that it will create value if shareholders
don't accept the offer is at odds with its extended track record of
value destruction;
- The board's complaints about the conditionality of Mithaq's
offer are insincere. The board has rebuffed Mithaq's attempts to
constructively engage and negotiate a friendly transaction that
would allow Mithaq to eliminate bid conditions. Instead, the board
chose to enter into the dilutive private placement with a group
opposed to Mithaq's offer to frustrate shareholder choice in an
effort to prevent Mithaq from satisfying the mandatory minimum
tender condition;
- The board's decision to proceed with the dilutive and
discounted private placement without first concluding its review of
the premium all-cash offer and making a recommendation to
shareholders suggests that the board is not really considering what
is in the best interests of shareholders; and
- The board has relied on an opinion from a financial advisor to
support its recommendation but has failed to provide shareholders
with the information they are entitled to see to make an informed
decision. Contrary to disclosure requirements applicable to insider
bids, (i) the financial advisor's opinion and directors' circular
provide no detail regarding the methodology, information or
financial analysis (including financial metrics) to enable
shareholders to understand the basis for the opinion; and (ii) the
directors' circular does not explain how the board or its special
committee took into account the financial advisor's fee
arrangements when considering the financial advisor's advice.
Mithaq has a history of owning high-quality businesses,
supporting first-class management teams, and championing
longstanding partnerships based primarily on trust. However, as
Mithaq has stated long ago, Mithaq has lost its trust in Aimia's
management and board.
Mithaq has filed an application with the OSC's Capital Markets
Tribunal to seek, among other things, an order requiring the
dilutive private placement to be cease traded. To avoid the OSC's
Capital Markets Tribunal implementing a temporary cease trade order
before a full hearing on the matter can occur, Aimia agreed to
certain undertakings relating to closing of the private placement,
including to effectively unwind the private placement if Mithaq's
application is successful, and other protections requested by
Mithaq have been ordered by the OSC's Capital Markets Tribunal. A
full hearing on Mithaq's application is expected to occur before
the end of the year and in advance of expiry of the
Offer.
The Choice For Long-Suffering Shareholders Is Clear – Tender
to the Premium Cash Offer Today
The cash consideration under the Offeror's takeover bid
represents premiums of approximately:
- 20% based on the closing price of $3.05 per common share on the TSX on October 2, 2023 (the last trading day prior to
the announcement of the intention to make the Offer); and
- 23% to the volume weighted average trading price of
$2.98 per common share on the TSX
over the 20 trading days ended October 2,
2023.
Given the dismal track record of the board and management, under
whose watch the stock price has steadily declined, the premium cash
offer provides certainty and the opportunity to redeploy
capital.
Full details regarding the premium cash Offer, including a
letter to shareholders and takeover bid circular, are available at
www.cashpremiumforaimia.com as well as under Aimia's profile
on SEDAR+ at www.sedarplus.ca.
Shareholders with questions or in need of assistance accepting
the Offer can contact Carson Proxy Advisors by telephone at
1-800-530-5189 (North American Toll-Free Number)
or 416-751-2066 (outside North
America) or by email at info@carsonproxy.com.
Further information is also available at
www.cashpremiumforaimia.com, which will be updated as the tender
process proceeds.
This press release does not constitute an offer to buy or the
solicitation of an offer to sell any securities of the Offeror,
Mithaq or Aimia.
ABOUT MITHAQ
Mithaq is the largest shareholder of Aimia, holding 26,059,000
common shares of Aimia representing approximately 30.96% of the
issued and outstanding common shares of Aimia, assuming the private
placement is unwound. Mithaq is a segregated portfolio company and
affiliate of Mithaq Holding Company, a family office based
in Saudi Arabia with investments in public equities, real
estate, private equity and income-producing assets in local and
international markets.
ADVISORS
Torys LLP is acting as legal advisor, Carson Proxy Advisors is
acting as Information Agent and Longview Communications and Public
Affairs is acting as communications advisor to the Offeror and
Mithaq in respect of the Offer.
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING INFORMATION
This document contains "forward-looking statements" (as
defined under applicable securities laws). These statements relate
to future events or future performance and reflect the Offeror and
Mithaq's expectations, beliefs, plans, estimates, intentions, and
similar statements concerning anticipated future events, results,
circumstances, performance or expectations that are not historical
facts. Forward-looking statements include, but are not limited to,
statements regarding: the Offer, including the response of Aimia's
board and management to the Offer; risks and challenges facing
Aimia; Mithaq's beliefs with respect to its investment in Aimia and
its related strategy; and statements with respect to Mithaq's
application to seek regulatory remedies in respect of, among other
things, Aimia's private placement, as well as any unwinding of that
private placement. Such forward-looking statements reflect the
Offeror and Mithaq's current beliefs and are based on information
currently available. In some cases, forward-looking statements can
be identified by terminology such as "may", "will", "should",
"expect", "plan", "anticipate", "believe", "estimate", "predict",
"potential", "continue", "target", "intend", "could" or the
negative of these terms or other comparable terminology.
By their very nature, forward-looking statements involve
inherent risks and uncertainties, both general and specific, and a
number of factors could cause actual events or results to differ
materially from the results discussed in the forward-looking
statements. In evaluating these statements, readers should
specifically consider various factors that may cause actual results
to differ materially from any forward-looking statement. These
factors include, but are not limited to, market and general
economic conditions (including slowing economic growth, inflation
and rising interest rates) and the dynamic nature of the industry
in which Aimia operates.
Although the forward-looking information contained in this
document is based upon what the Offeror and Mithaq believe are
reasonable assumptions, there can be no assurance that actual
results will be consistent with these forward-looking statements.
The forward-looking statements contained in this document are made
as of the date of this document and should not be relied upon as
representing views as of any date subsequent to the date of this
document. Except as may be required by applicable law, the Offeror
and Mithaq do not undertake, and specifically disclaim, any
obligation to update or revise any forward-looking information,
whether as a result of new information, further developments or
otherwise.
Neither the Offeror, Mithaq nor or any of their subsidiaries,
affiliates, associates, officers, partners, employees,
representatives and advisers, make any representation or warranty,
express or implied, as to the fairness, truth, fullness, accuracy
or completeness of the information contained in this document or
otherwise made available, nor as to the reasonableness of any
assumption contained herein, and any liability therefore (including
in respect of direct, indirect, consequential loss or damage) is
expressly disclaimed. Nothing contained herein is, or shall be
relied upon as, a promise or representation, whether as to the past
or the future and no reliance, in whole or in part, should be
placed on the fairness, accuracy, completeness or correctness of
the information contained herein.
SOURCE Mithaq Canada Inc.