Mithaq to launch $213M privatization bid to rid of AIMIA board and management

CPE News

CPE News (10.4.2023) – Mithaq Canada Inc., a wholly-owned subsidiary of Mithaq Capital SPC, the largest shareholder of Aimia Inc. (TSX: AIM), has announced that it intends to commence an all-cash takeover bid to acquire all of the issued and outstanding common shares of Aimia not already owned by the Mithaq or its affiliates, together with the associated rights issued and outstanding under the shareholder rights plan of Aimia, at a price of $3.66 per common share.

Mithaq said a formal offer and information circular with further details regarding the premium cash offer will follow in the coming days.

Mithaq owns or exercises control or direction over approximately 30.96% of the issued and outstanding Common Shares and has become increasingly disillusioned and frustrated by the actions of the Aimia board and management team, who have become entrenched and continue to engage in self-serving behavior that Mithaq does not view as being in the best interests of Aimia or its shareholders. Mithaq has sought to engage in productive discussions with the Aimia board and management team, however requests for such engagement have in some cases been rejected and, when discussions have taken place, any feedback that Mithaq has provided has been largely ignored.
Mithaq has zero faith in the ability of the Aimia board and management to act in the best interests of Aimia or its shareholders, and believes the Proposed Offer is its only remaining option. Mithaq has sent a letter to the Chair of the Aimia board and Aimia’s Chief Executive Officer confirming its intention to effect the commencement of the Proposed Offer. In addition, Mithaq has requested reasonable access to non-public information relating to Aimia’s business and operations, as well as access to members of Aimia senior management, for purposes of completing its due diligence and indicated that it would be open to discussing a friendly transaction with the Aimia board.

On May 25, 2023, Mithaq acquired 9,234,500 common shares at $4.05 per share for an aggregate purchase price of $37,399,725, pursuant to private agreements with certain third parties, to increase its holdings in AIMIA to 26,059,000 common shares, representing approximately 30.96% of the issued and outstanding shares.

The proposed acquisition values AIMIA at $308 million or $213 million to other shareholders, on non-diluted basis.

Aimia is an investment holding company with a portfolio of investments including 93.94% interest in Giovanni Bozzetto S.p.A., 100% ownership of Tufropes, 10.85% stake in Clear Media Limited, 48.9% equity stake in Kognitiv Corporation, 11.9% equity stake in TRADE X.

Mithaq Capital SPC of Riyadh, Saudi Arabia is an 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. Mithaq is a segregated portfolio company existing under the laws of the Cayman Islands.

photo credit: AIMIA

News Release

Mithaq Announces Intention to Make Premium All-Cash Takeover Bid to Acquire Outstanding Common Shares of Aimia at $3.66 Per Common Share

  • The cash consideration under the Proposed Offer represents a premium of approximately 20% based on the closing price of $3.05 per Common Share on the TSX on October 2, 2023 and an approximate 23% premium 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
  • Shareholders with questions about the Proposed Offer can contact Carson Proxy Advisors at 1-800-530-5189 or go to www.cashpremiumforaimia.com

Toronto, ON – October 3, 2023 – Mithaq Canada Inc. (the “Offeror”), a wholly-owned subsidiary of Mithaq Capital SPC (“Mithaq”), the largest shareholder of Aimia Inc. (TSX: AIM) (“Aimia”), announced today that it intends to commence an all-cash takeover bid (the “Proposed Offer”) to acquire all of the issued and outstanding common shares (the “Common Shares”) of Aimia not already owned by the Offeror or its affiliates, together with the associated rights issued and outstanding under the shareholder rights plan of Aimia, at a price of $3.66 per Common Share. The cash consideration under the Proposed Offer 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 today’s announcement of the Proposed 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.

In addition to the compelling premium, the Proposed Offer is attractive to Aimia shareholders for reasons that include:

  • Liquidity, Certainty of Value and Ability to Redeploy Capital. The Proposed Offer immediately crystalizes full and certain value to shareholders by providing 100% cash consideration for the Common Shares, giving depositing shareholders certainty of value and immediate liquidity while removing the financing, market and execution risks to shareholders. Further, the Proposed Offer provides depositing shareholders the ability to fully monetize and de-risk their investment and, ultimately, redeploy their capital into the market.
  • Fully Financed Cash Offer. The Proposed Offer is not subject to a financing condition. The Offeror will pay for the Common Shares subject to the Proposed Offer with funds made available to the Offeror pursuant to committed financing facilities.
    Risks of Status Quo. There is considerable risk to shareholders if the Aimia board and management team continue to pursue their current strategy. The poor track record of the current leadership team is reflected in Aimia’s:

    • disappointingperformance,withthefull-yearsharepriceperformancefallingshort of management’s expectations;
    • misalignedinvestmentstrategy,includingwithrespecttothepursuitofacquisitions of Tufropes and Bozetto (as well as other acquisitions Aimia has indicated it is considering), despite Aimia’s previously announced intention to pursue acquisitions in cash-generative businesses in either the U.S. or Canada;o misguided focus on private equity transactions, despite the encouragement from Mithaq to seek opportunities in the public markets;
    • low equity ownership by the Aimia board, resulting in a misalignment with the interests of shareholders; and
    • ineffective executive compensation program, which lacks tangible and/or calculable performance-based key performance indicators.
  • Potential for Negative Impact to Common Share Price if Offer Not Accepted. The Proposed Offer represents a premium to the market price of Aimia Common Shares on the last trading day prior to the date hereof. If the Proposed Offer is not successful, and no other offer is made for Aimia, the Offeror believes it is likely the trading price of Aimia Common Shares will decline to pre-Offer levels.

It is evident that the Aimia board and management remain intent on proceeding with their misguided and misaligned business strategy even though it is clear that the results continue to disappoint and that a large proportion of Aimia’s shareholders have lost confidence in that path.

Shareholders sent a clear message at the last annual meeting of shareholders on April 18, 2023, when no director of Aimia received more than 52.41% of votes cast in favour of their re-election and the previous Chair of the Aimia board was defeated with 58.31% of the votes cast against him.

Mithaq owns or exercises control or direction over approximately 30.96% of the issued and outstanding Common Shares and has become increasingly disillusioned and frustrated by the actions of the Aimia board and management team, who have become entrenched and continue to engage in self-serving behavior that Mithaq does not view as being in the best interests of Aimia or its shareholders. Mithaq has sought to engage in productive discussions with the Aimia board and management team, however requests for such engagement have in some cases been rejected and, when discussions have taken place, any feedback that Mithaq has provided has been largely ignored.
Mithaq has zero faith in the ability of the Aimia board and management to act in the best interests of Aimia or its shareholders, and believes the Proposed Offer is its only remaining option. Mithaq has sent a letter to the Chair of the Aimia board and Aimia’s Chief Executive Officer confirming its intention to effect the commencement of the Proposed Offer. In addition, Mithaq has requested reasonable access to non-public information relating to Aimia’s business and operations, as well as access to members of Aimia senior management, for purposes of completing its due diligence and indicated that it would be open to discussing a friendly transaction with the Aimia board.

A formal offer and information circular with further details regarding the premium cash offer will follow in the coming days. The circular is expected to be filed with securities regulatory authorities, accessible under Aimia’s profile on SEDAR+ in due course, and subsequently mailed to shareholders following receipt of the applicable securityholder lists from Aimia. For more information, shareholders can visit 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.

EARLY WARNING DISCLOSURE

This press release is being issued pursuant to National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, which requires a report to be filed under Aimia’s profile on SEDAR+ (www.sedarplus.ca) containing additional information respecting the foregoing matters. Aimia’s head office address is 176 Yonge Street, 6th Floor, Toronto, Ontario M5C 2L7.

Mithaq has filed an amended early warning report to disclose changes in certain material facts relating to its ownership of securities of Aimia, in compliance with National Instrument 62-103. In the amended report, Mithaq discloses, among other things, that they intend to effect the commencement of the Proposed Offer. In addition to its intention to effect the commencement of the Proposed Offer, Mithaq may explore from time to time a variety of alternatives it deems appropriate, in each case to the extent permitted under applicable law, including (i) increasing its position in Aimia through, among other things, the acquisition of securities of Aimia, and/or (ii) entering into transactions that increase or hedge its economic exposure to such securities without affecting its beneficial ownership of such securities.

Mithaq may explore from time to time other alternatives in addition to its intention to effect the commencement of the Proposed Offer with respect to its investment in Aimia, in each case to the extent permitted under applicable law, including, but not limited to, developing plans or intentions or taking actions itself or with joint actors which relate to or would result in one or more of the transactions or matters referred to in paragraphs (a) through (k) of Item 5 of Mithaq’s Early Warning Report filed on SEDAR+. For greater certainty, Mithaq may: (a) engage with management and/or the board of Aimia concerning the foregoing and its business, management, operations, capitalization, financial condition, governance, strategy and future plans (including taking any actions it deems appropriate to influence the affairs of Aimia); (b) initiate or make public or private proposals or offers involving Aimia, including (i) any takeover bid, amalgamation, consolidation, acquisition, business combination, arrangement, recapitalization, restructuring, liquidation, dissolution, disposition of assets or other similar transactions involving Aimia (including its subsidiaries and joint ventures or any of their respective securities or assets), and (ii) any waiver, amendment or modification to Aimia’s articles of incorporation or by-laws; (c) initiate, solicit or join as a party, any litigation, arbitration or other proceeding (including regulatory proceedings) involving Aimia or any of its subsidiaries or any of its or their respective current or former directors or officers (including derivative actions and exercising any dissent rights); (d) initiate, propose, encourage, advise, influence or otherwise participate in the solicitation of proxies with respect to the voting of any securities of Aimia on any matter (including pursuant to any available exemptions under applicable laws); (e) grant any proxy with respect to the securities of Aimia; (f) engage in any short sale or similar transaction that derives value from a decline in Aimia’s securities; (g) deposit any securities of Aimia into a voting trust, or subject any securities of Aimia to any agreement or arrangement with respect to the voting of such securities; (h) (i) call, requisition or seek to call or requisition a meeting of the shareholders of Aimia, (ii) seek election or appointment to, or representation on, the board of Aimia or (iii) effect the removal of any member of the board of Aimia or otherwise alter the composition of the board of Aimia (including by voting against the directors or through any “no vote” or similar campaign or proposing nominees); (i) submit, or induce any person to submit, any shareholder proposal; (j) enter into any agreement with Aimia (including any settlement or resolution agreement); (k) retain any advisors in furtherance of any of the foregoing; (l) make any request for securityholder list materials or other books and records of Aimia or any of its subsidiaries including under any statutory or regulatory provisions providing for shareholder access to such securityholder list materials, books and records of Aimia or its subsidiaries; (m) enter into discussions, agreements or understandings with any person with respect to or in contemplation of the foregoing or advise, assist, support or encourage any person to take any action consistent with the foregoing; and (n) make any public disclosure of any consideration, intention, plan or arrangement with respect to or in contemplation of any of the foregoing.

Although the foregoing reflects activities presently contemplated by Mithaq in addition to its intention to effect the commencement of the Proposed Offer with respect to its investment in Aimia, the foregoing is subject to a number of factors, including but not limited to, the price of Aimia’s securities, Aimia’s business and financial condition and prospects, conditions in the securities markets and general economic and industry conditions, the availability of funds, the evaluation of other investment opportunities available to Aimia, and is subject to change at any time, and there can be no assurance that Mithaq will take any of these additional actions referred to above.

For further information, including a copy of the corresponding report filed with Canadian securities regulators, please visit www.sedarplus.ca or contact Mithaq Capital SPC, Saudi Arabia, P.O. Box 86611, Riyadh 11632, Attention: Turki Saleh AlRajhi (mithaq-capital@mithaqholding.com).

ABOUT MITHAQ

Mithaq is the largest shareholder of Aimia, holding 26,059,000 Common Shares representing approximately 30.96% of the issued and outstanding Common Shares. 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 Proposed Offer.

FOR MORE INFORMATION
Shareholders
www.cashpremiumforaimia.com
Carson Proxy Advisors
North American Toll Free: 1-800-530-5189
Collect Call Outside North America: 416-751-2066 info@carsonproxy.com

Media
Boyd Erman
Longview Communications & Public Affairs 416-649-8007 berman@longviewcomms.ca
Joel Shaffer
Longview Communications & Public Affairs
416-649-8006
jshaffer@longviewcomms.ca

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 Proposed Offer, including the anticipated timing of the Proposed Offer; reasons to accept the Proposed Offer and expectations that such reasons continue to be prevailing; risks and challenges facing Aimia; and Mithaq’s beliefs with respect to its investment in Aimia and its related strategy. 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 asmay 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.