AIMIA INC. $15.80 - Toronto symbol AIM

AIMIA INC. $15.80 (Toronto symbol AIM; TSINetwork Rating: Extra Risk) (514-205-7315; www.aimia.com; Shares outstanding: 172.5 million; Market cap: $2.7 billion; Dividend yield: 4.3%) has finalized its deal for TD Bank to become the primary credit card issuer for Aeroplan, Aimia’s main loyalty program.

TD and Aimia are also negotiating a new agreement with Canadian Imperial Bank of Commerce, which has been Aimia’s banking partner in the Aeroplan program for the past 22 years.

This agreement would let CIBC sell around half of its existing Aeroplan accounts to TD. That would cut the risk of these clients switching to other loyalty plans or banks.

In return, CIBC would realize some value from the sale and hang on to Aeroplan accounts held by customers who also bank at CIBC. That’s about half of the Aeroplan portfolio. CIBC would also be able to issue Aeroplan credit cards to these clients for an additional 10 years.

The parties aim to reach an agreement by August 26, 2013. If not, CIBC will legally challenge the original TD/Aimia deal.

Aimia is still a buy.

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