Aimia Inc. AIM-T and its largest shareholder have called a truce in a long-running battle over the future of the investment company.
Aimia, the former owner of the Aeroplan loyalty rewards program, said Thursday that investment fund Mithaq Capital SPC will get two seats on the company’s board and the two parties will halt all outstanding litigation.
Saudi Arabia-based Mithaq, which owns roughly 27 per cent of Aimia, is the private investment company for the Al Rajhi family – founders of the Al Rajhi Bank, the world’s largest Islamic bank by market capitalization. Aimia will appoint Mithaq managing director Muhammad Asif Seemab and Rhys Summerton, founder of U.K.-based value investor Milkwood Capital, to its board as part of the agreement.
The Aimia-Mithaq squabble, which started in early 2023, centred around the best way for Aimia to use the half-billion dollars it made by selling the Aeroplan loyalty program to Air Canada in 2019.
In 2023, Aimia bought Indian maritime ropemaker Tufropes Pvt. Ltd. and Italian chemical company Giovanni Bozzetto SpA for $238-million and $258-million, respectively. But Mithaq believed Aimia would be better off investing its money in publicly traded stocks.
In early 2023, Mithaq nearly succeeded in ousting the entire Aimia board of directors by urging shareholders to reject Aimia’s nominees. Then, Mithaq tried and failed to acquire Aimia for $308-million in cash.
Earlier this year, Mithaq submitted its own slate of director nominees for the Aimia board. While the management nominees won out, the dissident vote resulted in Aimia losing its advisory vote on executive compensation, known as say-on-pay.
In a statement, Tom Finke, Aimia’s executive chairman, said the agreement will allow the company “to now focus all of our efforts on unlocking the company’s value and sustaining the recent momentum generated by our core holdings.”
Separately, Aimia spokesperson Joe Racanelli said the agreement means the company “will continue to pursue the strategy we articulated earlier this year – namely, grow our core holdings and pursue our strategic review process.”
Turki AlRajhi, chairman and chief executive officer of Mithaq, said in Thursday’s announcement that “our ultimate motivation has always been, and continues to be, protecting and compounding the intrinsic value of all fellow shareholders’ equity stakes, including Mithaq’s.”
No other Aimia investor owns more than 1.3 per cent of the company’s shares, according to S&P Global Market Intelligence.
Aimia shares are down more than 20 per cent year-to-date. The stock was essentially unchanged in early trading Thursday.
As part of the agreement announced Thursday, Mithaq will vote all of its common shares of Aimia in favour of the company’s management nominees for the board in 2025. Aimia has agreed to pay Mithaq US$1.5-million as reimbursement for its litigation expenses.
Because Aimia is federally incorporated, it is required to have Canadian residents as 25 per cent of its directors. The company currently has seven directors, with two Canadian residents.
Aimia said it will appoint Mr. Seemab immediately. Mr. Summerton will serve as an observer until a special meeting of shareholders expected within 90 days, where shareholders will also be asked to elect Canadian resident Shahir Guindi, the Montreal-based outgoing national co-chair of Osler, Hoskin & Harcourt LLP, as a director.
All current directors are expected to continue serving, Aimia said.
Editor’s note: A previous version of this story used outdated figures for Aimia’s 2023 acquisitions of Indian maritime ropemaker Tufropes Pvt. Ltd. and Italian chemical company Giovanni Bozzetto SpA. The final acquisition prices were $238-million and $258-million, respectively.