SHAREHOLDERS ARE ADVISED TO NOT TENDER THEIR
COMMON SHARES
TORONTO, Oct. 20,
2023 /CNW/ - Aimia Inc. (TSX: AIM) ("Aimia" or
the "Company") issued the following statement to inform
shareholders that the Company has filed its Directors' Circular
(the "Circular") in connection with the hostile take-over
bid from Mithaq Capital SPC ("Mithaq") to acquire all of the
issued and outstanding common shares of Aimia (the "Hostile
Offer"). The Board, following receipt of the recommendation of
a committee of independent directors (the "Special
Committee"), unanimously recommend that Aimia's shareholders
reject the Hostile Offer for their Company.
The Board has arrived at this recommendation after careful
deliberation and has done so after considering the following
reasons:
The Hostile Offer undervalues the Company and is not
compelling:
The Hostile Offer does not provide a change of
control premium in line to the relative average M&A premium in
Canada. The small, below-average
premium, is even less compelling when it is considered in the
context of the timing of the Hostile Offer, given that the Canadian
S&P/TSX Composite Index is trading at its lowest year-to-date
levels.
The Hostile Offer is significantly below equity research
analyst target prices:
The Hostile Offer is significantly
below the target common share price from the two independent
analysts that cover Aimia and does not reflect some of the major
potential growth opportunities that the Company is currently
pursuing.
The Hostile Offer contains extraordinary and unprecedented
conditionality which calls into question the seriousness and
legitimacy of the Hostile Offer:
Shareholders should note
that the Hostile Offer contains 20 conditions, an unusually high
number – which also includes conditions not subject to materiality
thresholds or objective criteria, which must be satisfied or waived
before Mithaq is obligated to take up and pay for any common shares
tendered in the offer. The Hostile Offer is not a firm offer.
The Hostile Offer is opportunistic and is designed to capture
Aimia's true value for Mithaq rather than paying it to all
shareholders:
The Hostile Offer does not account for the
meaningful growth opportunities available to the Company given the
successful acquisitions of recent platform investments Bozzetto and
Tufropes, the subsequent synergistic tuck-in acquisition of
Cortland, as well as other synergies and near-term opportunities.
Furthermore, the change of control associated with this Hostile
Offer would result in a permanent inability for the Company to
utilize its available tax losses.
Mithaq has purchased Common Shares at prices much higher than
what it is offering under the Hostile Offer:
Mithaq's
disclosed purchases of common shares dating back to March 2022 are all at prices above the Hostile
Offer price. Mithaq has accumulated its minority position at a
premium of 12% to their Hostile Offer, indicating that in addition
to offering an inadequate change of control premium, they want
shareholders to sell at a significant discount to the prices Mithaq
was willing to pay for its minority position.
The Special Committee and Board have received an Inadequacy
Opinion from their financial advisor:
The Special Committee
and Board received a written opinion from their financial advisor
dated October 19, 2023, that as of
that date and based upon and subject to the assumptions,
limitations and qualifications contained therein that the
consideration offered to Shareholders (other than Mithaq and its
affiliates) under the Hostile Offer is inadequate, from a financial
point of view, to such Shareholders. The full text of the
opinion is detailed in the circular.
The Board believes that the Hostile Offer and Mithaq's
actions are intended to hinder the Company's outstanding litigation
against Mithaq:
The Company is currently suing Mithaq for
various breaches of the Securities Act (Ontario). The trial is scheduled to begin on
January 8, 2024.The timing of the
Hostile Offer is suspicious, given that it will expire shortly
after the outstanding litigation against Mithaq is expected to
be heard in court. One purpose of the Hostile Offer may therefore
be to disrupt the litigation process.
The Hostile Offer contains inadequate disclosure of Mithaq's
financing sources and does not provide sufficient certainty as to
Mithaq's financing:
The Hostile Offer does not contain
sufficient details concerning the conditions with regard to the
availability of the required financing by Mithaq to consummate the
Hostile Offer. The minimal information that has been
disclosed in the Hostile Offer circular fails to provide sufficient
certainty that Mithaq has committed financing to take up and pay
for all of the common shares subject to the Hostile Offer.
The current share price is a discount to the Hostile
Offer:
The closing price of the common shares on the TSX
have consistently traded below the Hostile Offer price and is
likely attributable to the significant conditionality embedded in
the Hostile Offer.
Aimia's Directors and officers, as well as all of the
investors in the Private Placement and other institutional
shareholders intend to reject the Hostile Offer:
All of
Aimia's Directors and officers, as well as the investors in the
Private Placement intend to reject the Hostile Offer. Aimia has
also received an indication from several other shareholders that
they intend to reject the Hostile Offer as well.
The Circular details these reasons for the recommendation in
full and is available at www.aimia.com/mithaqoffer and has been
filed on SEDAR+.
To reject the Hostile Offer, shareholders DO NOT need to
take any action.
Shareholders with questions about the Hostile Offer or who have
already tendered their common shares and wish to withdraw are
encouraged to call Aimia's strategic shareholder advisor, Kingsdale
Advisors, at 1-800-495-6389 or contactus@kingsdaleadvisors.com.
Update on the Private
Placement
Pursuant to an application made by Mithaq Canada Inc., a hearing
of the Capital Markets Tribunal was held on the morning of
October 19, 2023, to consider
potential terms pursuant to which the previously announced Private
Placement could close as scheduled. Following the release of the
decision of the Capital Markets Tribunal, Aimia has confirmed that
it is proceeding to close the Private Placement as soon as
practicable. It is expected that the Capital Markets Tribunal will
proceed to conduct a full hearing of Mithaq's application.
If the Private Placement closes in advance of that hearing and
Mithaq is successful in its application, the Company has undertaken
to, among other things, unwind the Private Placement upon the
direction of the Capital Markets Tribunal. If Mithaq's application
is successful, upon the request of the Capital Markets Tribunal:
(a) Aimia shall rescind the private placement forthwith and return
to the investors any consideration paid under the private
placement; (b) Aimia shall cancel the common shares and warrants
issued under the private placement, as well as all common shares
issued upon the exercise of the warrants (collectively, the
"Securities"); and (c) all agreements entered into in connection
with the private placement including, for greater certainty, all
agreements providing for Investor Rights, shall be terminated.
Unless and until such time as Mithaq's application has been
heard and a decision rendered, Aimia has undertaken that the
Securities (i) may not be traded, (ii) may not be voted at any
Aimia shareholders' meeting, (iii) may not be tendered to any
alternative take-over bid or issuer bid that may be commenced by a
third party or Aimia in respect of the Aimia common shares; and
(iv) in the event that the deposit period is shortened for the
Offer will not be included for the purposes of Mithaq satisfying
the minimum tender condition contained in section 2.29.1(c) of
National Instrument 62-104 – Take-Over Bids and Issuer Bids ("NI
62-104").
Advisors
Kingsdale Advisors is acting as strategic shareholder advisor
and communications advisor to Aimia. Norton Rose Fulbright
Canada LLP is acting as legal counsel to Aimia. Goodmans LLP is
acting as legal counsel and Canaccord Genuity Corp. is acting as
financial advisor to the Special Committee.
About Aimia
Aimia Inc. is a holding company that makes long-term investments
in private and public businesses through controlling or minority
stakes. We target companies with durable economic advantages
evidenced by a track record of substantial free cash flow
generation over complete business cycles, strong growth prospects,
and guided by strong, experienced management teams. Headquartered
in Toronto, Canada, Aimia is
positioned to invest in any sector, wherever a suitable opportunity
can be identified worldwide. In addition, we seek investments that
may efficiently utilize the Company's operating and capital loss
carry-forwards to further enhance stakeholder value.
Forward-Looking
Statements
This press release contains statements that constitute
"forward-looking information" within the meaning of Canadian
securities laws ("forward-looking statements"), which are based
upon our current expectations, estimates, projections, assumptions
and beliefs. All information that is not clearly historical in
nature may constitute forward-looking statements. Forward-looking
statements are typically identified by the use of terms or phrases
such as "anticipate", "believe", "could", "estimate", "expect",
"intend", "may", "plan", "predict", "project", "will", "would" and
"should", and similar terms and phrases, including references to
assumptions.
Forward-looking statements in this press release include, but
are not limited to, statements with respect to the Private
Placement, the anticipated proceeds therefrom and the anticipated
use of such proceeds; the appointment of the two new directors in
connection with the Private Placement closing; Aimia's current and
future strategic initiatives, investment opportunities and use of
cash; and Aimia's current and future strategic initiatives and
investment opportunities; the expected closing date of the Private
Placement and the application of Mithaq Canada Inc. before the
Capital Markets Tribunal and the outcome thereof.
Forward-looking statements, by their nature, are based on
assumptions and are subject to known and unknown risks and
uncertainties, both general and specific, that contribute to the
possibility that the forward-looking statement will not occur. The
forward-looking statements in this press release speak only as of
the date hereof and reflect several material factors, expectations
and assumptions. While Aimia considers these factors, expectations
and assumptions to be reasonable, actual events or results could
differ materially from the results, predictions, forecasts,
conclusions or projections expressed or implied in the
forward-looking statements. Undue reliance should not be placed on
any predictions or forward-looking statements as these may be
affected by, among other things, changing external events and
general uncertainties of the business. A discussion of the material
risks applicable to us can be found in our current Management
Discussion and Analysis and Annual Information Form, each of which
have been or will be filed on SEDAR+ and can be accessed at
www.sedarplus.ca. Aimia cautions that the list of risk factors
included in such Management Discussion and Analysis is not
exhaustive. Except as required by applicable securities laws,
forward-looking statements speak only as of the date on which they
are made and we disclaim any intention and assume no obligation to
publicly update or revise any forward-looking statement, whether as
a result of new information, future events or otherwise.
SOURCE Aimia Inc.