Largest Aimia shareholder says Air Canada group's offer was 'blatantly inadequate'

The largest shareholder in Aeroplan's parent company, AimiaInc., has applauded the firm's board of directors for not agreeing to sell the Aeroplanpoint program toa group led by Air Canada.

In an open letter,Christopher Mittleman, the chief investment officer and managing partner atMittleman Brothers, LLCof New York, said therecent offer from Air Canada and its partnersTD, CIBC and Visa was "misleading, coercive, and blatantly inadequate."

"Iapplaud the board for not acquiescing and continuing negotiations," he said in the five-page letter, which was issued Monday.

"Aeroplan is the lynchpin in the nexus of this powerful network, where TD, CIBC, Visa, Amex, and Air Canada generate hundreds of millions in net profits annually from their Aeroplan card holders," he said.

Mittleman said Aimiashould seek an offer of $1 billion, plus a 20 per cent premium. He added that if Aimiacan't get that much for Aeroplan, then he'd prefer they not sell the loyalty program.

MittlemanBrothers owns about 17.6 per cent of Aimia.

On Tuesday, Aimia shares hit an intradayhigh as $3.98before slipping back a bit to trade up 1.9 per cent at $3.81.

Last Friday, AimiaCEO Jeremy Rabesaid the company remained open to negotiating with Air Canada The Air Canada group offered $250 million cash and the assumption of $2 billion of mileage liability, but they later boost their bid to $325 million. Aimiasaid that was still below the$450 million it believed was fair.

Rabe's comment about negotiating with Air Canada came on the same day thatAimiasaid it had reached a deal with Porter Airlines to become anAeroplanpartner when Air Canada departs in 2020.

On Tuesday, Aimiasaid it had also struck agreements with Flair Airlines andAir Transat to also become carrier partners

Aimiaalso recently said it was in talks with the Oneworld alliance, which includesBritish Airways, American Airlines and Cathay Pacific.