BMO Financial Group announced a deal Friday to buy the Air Miles loyalty rewards program in sa国际传媒 after its U.S. parent company filed for bankruptcy.
The bank’s so-called stalking horse offer for LoyaltyOne Co. is $160 million US, subject to certain adjustments, according to court documents.
Air Miles president Shawn Stewart said the deal “brings stability to the Air Miles program.”
“It gives us the opportunity to grow the program for our collectors and partners, and confidence in the future of the program,” he said.
“Our U.S. parent company had a ton of debt and that just constrained our ability to invest in value for the collector.”
The deal has no impact on reward miles balances or the ability to redeem miles, Stewart added.
Air Miles is one of the oldest and largest loyalty programs in sa国际传媒, with nearly 10 million active users. Collectors earn Air Miles through participating stores, services and payment cards, which can be redeemed for “aspirational rewards” like merchandise, travel, events, and attractions.
Yet Air Miles has lost a string of big retailers in sa国际传媒 in recent years.
Last summer, Sobeys and Thrifty owner Empire Co. Ltd. and office supply retailer Staples said they would be scrapping the Air Miles program, a year after the Liquor Control Board of Ontario and Lowe’s sa国际传媒 pulled out of the program.
The Air Miles parent company stock, which was traded on Nasdaq, fell after Sobeys pulled out of the program.
Loyalty Ventures Inc., the parent company of LoyaltyOne, filed for Chapter 11 bankruptcy in the U.S. on Friday. It also delisted its common stock from the Nasdaq.
The BMO deal for Air Miles has been proposed as part of LoyaltyOne’s proceeding under the Companies’ Creditors Arrangement Act in sa国际传媒.
The process will include a sale and investment solicitation process to seek any other interest in the Air Miles business.
The sale transaction is contingent on LoyaltyOne not receiving a more favourable offer and will require court approval.
BMO, a founding partner of Air Miles since 1992, said the purchase would accelerate the loyalty program’s future growth.
“We will bring the ownership of Air Miles home to sa国际传媒 and strengthen its offering for Canadian consumers and businesses,” said Ernie Johannson, BMO’s group head, North American personal and business banking.
