Believes Immediate Board Reconstitution is Necessary to Address Poor Performance and Value Destruction
Intends to Withhold Votes for All Legacy Board Members at the Upcoming Annual General Meeting
Condemns the Current Board's Ineffective Oversight and the Resulting Decline in Shareholder Value
SEATTLE, April 13, 2018 /PRNewswire/ -- 22NW Fund, LP ("22NW" or, "we"), an investment partnership with more than $200 million under management, issued a statement today regarding Aimia Inc.'s ("Aimia" or, the "Company") (AIM.TO) upcoming Annual General Meeting of Shareholders (the "AGM") to elect the Company's board of directors (the "Board"), scheduled to be held on April 27, 2018. 22NW owns approximately 4.3 million shares, or about 3%, of Aimia.
Aron English, the Manager of 22NW Fund stated, "We intend to withhold our votes for all of Aimia's legacy Board members. We believe the abysmal performance of Aimia's stock as well as the repeated incompetence demonstrated by Aimia's legacy Board members speaks for itself and should be obvious to all shareholders. Aimia holds a collection of world-class assets with a strong financial position, yet the current Board – which owns close to zero equity in the Company – has managed to wipe out over 80% of Aimia's equity value in less than a year. Although we cannot advise other investors how to vote their shares, we note that the Company has adopted a Majority Voting Policy pursuant to which any director nominee receiving fewer than 50% of votes cast "for" his or her election at the AGM is required to immediately tender his or her resignation."
22NW believes the legacy Board is single-handedly responsible for the Company's unnecessary and completely avoidable value destruction and must not be re-elected at the AGM to prevent further destruction in shareholder value.
Mr. English continued, "Shareholders should know that if Aimia's legacy Board members receive less than 50% of votes cast at the annual meeting, Aimia's Majority Voting Policy requires such Board members to tender their resign immediately following such a decisive referendum from the Company's true owners, its shareholders. If the Board attempts to confuse or avoid this fact, we will take further steps to protect the rights of Aimia shareholders."
"Aimia's legacy Board members have destroyed a staggering amount of shareholder value during their tenure, from the botched Air Canada negotiation to the most recent Nectar deal in which the Company managed to sell an asset producing substantial free cash flow for a negative value. Our team, with over five decades of collective investment experience, views this to undoubtedly be the single worst corporate transaction we have ever witnessed."
"We believe shares of Aimia are significantly undervalued. With a qualified and properly aligned Board in place, we believe Aimia stock has at least 200-400% potential upside from current levels. Aeroplan remains a robust, high quality, sustainable business and we estimate that this asset alone is worth $1 billion even without Air Canada, which is many times Aimia's current market capitalization. In addition, Aimia's financial position is strong, with $550 million of cash on hand and $250 million of forecasted cash flow over just the next 24 months. Aimia also owns many valuable assets unrelated to Aeroplan, with PLM alone worth over $500 million."
The time has come for a properly aligned Board of honest and qualified fiduciaries to lead Aimia into a bright future for the benefit of all partners, plan members, shareholders and employees.
Shareholders: this is OUR company and we must preserve and enhance the value of our investment. Aimia's legacy Board has failed miserably and must be reconstituted immediately.
How We Intend to Vote Our Shares
LEGACY BOARD MEMBERS: VOTE WITHHOLD
NEW BOARD MEMBERS: VOTE FOR
About 22NW Fund, LP:
Founded in 2015, 22NW Fund is a Seattle-based value fund with $200 million of assets under management. The firm specializes in small and microcap investments and has a multi-year investment horizon.