Air Canada parent ACE Holdings yesterday unveiled the pricing for the initial public offering of its 12.5% stake in the Aeroplan frequent flyer program, revealing that the program is worth C$2 billion (US$1.6 billion). Click on Read More for full story.
ACE said the Aeroplan Income Fund yesterday signed an agreement with a group of underwriters to sell 25 million units of the fund at C$10 per unit priced as part of the IPO. The final prospectus for the Aeroplan IPO was filed yesterday with the Canadian securities regulatory authorities.
The C$2 billion total valuation makes Aeroplan "one of Canada's largest business trusts and the first-ever monetization of an airline frequent flyer program," said ACE CEO Robert Milton. "The Aeroplan IPO is a significant step in ACE's commitment to further illuminate the value inherent in its business units."
ACE last month first announced plans to hold the IPO but didn't price the Aeroplan units until this week (DAILY, May 23). The fund has conditional approval to list the units on the Toronto Stock Exchange (TSX), and closing of the deal is expected next week. The fund's units will trade on the TSX under the symbol "AER.UN." Aeroplan will keep about C$100 million of the net proceeds of the IPO to partly fund a reserve for Aeroplan Mile redemptions and finance some capital expenditures. The remaining C$125 million will go to ACE to use for "general corporate purposes."
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