- BMO's acquisition would accelerate the future growth of AIR
MILES, one of Canada's largest
loyalty programs
- A reinvigorated program would benefit all Canadians
collecting AIR MILES, as well as merchants and partners across the
country
- AIR MILES collectors benefit from rewards at more than 300
leading Canadian, global, and online brands, and at thousands of
retail and service locations across the country
TORONTO, March 10,
2023 /CNW/ - BMO (TSX: BMO) (NYSE: BMO) and
LoyaltyOne, Co. (LoyaltyOne), a subsidiary of Loyalty Ventures Inc.
(LVI) (NASDAQ: LYLT) today announced the signing of a purchase
agreement for BMO to acquire LoyaltyOne's AIR MILES Reward Program
(AIR MILES) business. For BMO customers and all AIR MILES
collecting Canadians, as well as merchants and partners across the
country, BMO's acquisition of AIR MILES would be a
made-in-Canada opportunity to
enable a reinvigoration for one of Canada's largest loyalty programs. BMO's
acquisition of the AIR MILES business is subject to court
approval (as described below), the receipt of required regulatory
approvals and other customary conditions.
As a founding partner of the AIR MILES program since 1992, BMO
is well positioned to strengthen and grow Canada's most recognized loyalty program. With
nearly 10 million active collector accounts, representing
approximately two-thirds of all Canadian households, AIR MILES is
the only loyalty program of its kind to give collectors the
flexibility and choice to earn Reward Miles almost anywhere and
redeem them at a broad range of merchants on aspirational rewards
such as merchandise, travel, events, and attractions, or instantly
on everyday essentials, in-store or online, through AIR MILES Cash
at participating partner locations.1
"As a leading partner, we have always believed in the value of
the AIR MILES program for Canadians and are confident about the
continued opportunities to build even greater customer loyalty,"
said Ernie Johannson, Group Head,
North American Personal & Business Banking, BMO. "If our
acquisition of the AIR MILES business is successful, we will bring
the ownership of AIR MILES home to Canada and strengthen its offering for
Canadian consumers and businesses together with leading Canadian,
global and online program partners and merchants."
"As AIR MILES' longstanding partner, BMO's acquisition would be
a significant step forward in solidifying the future of the AIR
MILES program," said Shawn Stewart,
President, AIR MILES Reward Program. "BMO's agreement to purchase
the Air Miles business has no impact on AIR MILES collectors'
Reward Miles balances or on collectors' ability to collect and
redeem AIR MILES Reward Miles. AIR MILES continues to serve its
customers — ensuring that they are rewarded richly and that they
can use their Reward Miles in a way that meets their needs."
BMO's acquisition of the AIR MILES Reward Program business has
been proposed as part of LoyaltyOne's proceeding under the
Companies' Creditors Arrangement Act (Canada) (the CCAA) commenced in the Ontario
Superior Court of Justice (Commercial List) (the Court).
LoyaltyOne's CCAA proceeding will also involve a sale and
investment solicitation process to solicit any other interest in
the AIR MILES business. BMO's acquisition or a proposed acquisition
by any other bidder will be subject to Court approval.
1 Source:
www.airmiles.ca/en/about-us.html
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About BMO Financial
Group
Serving customers for 200 years and counting, BMO is a highly
diversified financial services provider - the 8th largest bank, by
assets, in North America. With
total assets of $1.15 trillion as of
January 31, 2023, and a team of
diverse and highly engaged employees, BMO provides a broad range of
personal and commercial banking, wealth management and investment
banking products and services to 12 million customers and conducts
business through three operating groups: Personal and Commercial
Banking, BMO Wealth Management and BMO Capital Markets.
About the AIR MILES Reward
Program
The AIR MILES Reward Program is Canada's most recognized loyalty program, with
millions of active collector accounts. AIR MILES collectors earn
Reward Miles at more than 300 leading Canadian, global, and online
brands and at thousands of retail and service locations across the
country. This activity powers an unmatched data asset that, along
with world-class analytics and marketing capabilities, enables
clients to accelerate their marketing activities and ROI. The AIR
MILES Reward Program gives collectors the flexibility and choice to
use Reward Miles on aspirational rewards such as merchandise,
travel, events, and attractions, or instantly on everyday
essentials, in-store or online, through AIR MILES Cash at
participating partner locations. For more information, visit
www.airmiles.ca.
BMO cautionary statement regarding
forward-looking information
Certain statements in this press release are forward-looking
statements. All such statements are made pursuant to the "safe
harbor" provisions of, and are intended to be forward-looking
statements under, the United States Private Securities Litigation
Reform Act of 1995 and any applicable Canadian securities
legislation. Forward-looking statements in this document may
include, but are not limited to, statements with respect to the
expected closing of the proposed transaction, plans for the
integration of AIR MILES business, our plans or future actions with
respect to the AIR MILES business, the regulatory environment in
which we operate, the results of, or outlook for, our operations,
and include statements made by our management. Forward-looking
statements are typically identified by words such as "will",
"would", ""believe", "expect", "anticipate", "project", "estimate",
"plan", "may", "might", "forecast" and "could" or negative or
grammatical variations thereof.
By their nature, forward-looking statements require us to make
assumptions and are subject to inherent risks and uncertainties,
both general and specific in nature. There is significant risk that
predictions, forecasts, conclusions or projections will not prove
to be accurate, that our assumptions may not be correct, and that
actual results may differ materially from such predictions,
forecasts, conclusions or projections. We caution readers of this
document not to place undue reliance on our forward-looking
statements, as a number of factors – many of which are beyond our
control and the effects of which can be difficult to predict –
could cause actual future results, conditions, actions or events to
differ materially from the targets, expectations, estimates or
intentions expressed in the forward-looking statements.
The future outcomes that relate to forward-looking statements
may be influenced by many factors, including, but not limited to:
the possibility that the proposed transaction does not close when
expected or at all because, another purchaser of the AIR MILES
business may emerge from the sale and investment solicitation
process, required Court approval, regulatory approvals and other
conditions to closing are not received or satisfied on a timely
basis or at all or are received subject to adverse conditions or
requirements; the anticipated benefits from the proposed
transaction are not realized in the time frame anticipated or at
all as a result of changes in general economic and market
conditions, laws and regulations and their enforcement, and the
degree of competition in the business areas in which the AIR MILES
business operates; the AIR MILES business may not perform as
expected or in a manner consistent with historical performance; the
ability to promptly and effectively integrate and reinvigorate the
AIR MILES business; diversion of management time on
transaction-related issues; and those other factors discussed in
the Risks That May Affect Future Results section, and the sections
related to credit and counterparty, market, insurance, liquidity
and funding, operational non-financial, legal and regulatory,
strategic, environmental and social, and reputation risk, in the
Enterprise-Wide Risk Management section of BMO's 2022 Annual
Report, and the Risk Management section in BMO's First Quarter 2023
MD&A, all of which outline certain key factors and risks that
may affect our future results and our ability to anticipate and
effectively manage risks arising from all of the foregoing factors.
We caution that the foregoing list is not exhaustive of all
possible factors. Other factors and risks could adversely affect
our results. Investors and others should carefully consider these
factors and risks, as well as other uncertainties and potential
events, and the inherent uncertainty of forward-looking
statements.
We do not undertake to update any forward-looking statements,
whether written or oral, that may be made from time to time by the
organization or on its behalf, except as required by law. The
forward-looking information contained in this document is presented
for the purpose of assisting shareholders and analysts in
understanding the proposed transaction and may not be appropriate
for other purposes.
LVI Cautionary Statement Regarding
Forward-Looking Statements
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements give LVI's expectations or forecasts of
future events and can generally be identified by the use of words
such as "believe," "expect," "anticipate," "estimate," "intend,"
"project," "plan," "likely," "may," "should" or other words or
phrases of similar import. Similarly, statements that describe
LVI's business strategy, outlook, objectives, plans, intentions or
goals also are forward-looking statements. Examples of
forward-looking statements include, but are not limited to,
statements LVI makes regarding, and the guidance LVI gives with
respect to, anticipated operating or financial results and future
economic conditions, all of which are subject to risks that
include, but are not limited to, LVI's high level of indebtedness;
increases in market interest rates; continuing impacts related to
COVID-19, including variants, labor shortages, reduction in demand
from clients, supply chain disruption for LVI's reward suppliers
and capacity constraints, rising costs or other disruptions in the
airline or travel industries; changes in geopolitical conditions,
including the Russian invasion of Ukraine and related global sanctions and
Russian restrictions or actions with respect to local assets;
fluctuation in foreign exchange rates; execution of restructuring
plans and any resulting cost savings; loss of, or reduction in
demand for services from, significant clients; loss of active AIR
MILES Reward Program collectors or greater than expected
redemptions by the same; unfavorable resolution of pending or
future litigation matters; disruption to operations due to LVI's
separation from its former parent or failure of the separation to
be tax-free; new regulatory limitations related to consumer
protection or data privacy limiting LVI's services; loss of
consumer information due to compromised physical or cyber security;
the transaction support agreement, pursuant to which LVI and the
other parties thereto agreed to the principal terms of LVI's
proposed financial restructuring may be terminated by certain of
its parties if specified milestones are not achieved, amended or
waived, or if certain other events occur; LVI's ability to operate
within the restrictions and the liquidity limitations of the
debtor-in-possession financings LVI anticipates incurring in
connection with its chapter 11 cases and the CCAA proceedings;
LVI's receipt of other acquisition bids and negotiations with
associated bidders in connection with the sale and investment
solicitation process for the AIR MILES business; and the ability to
obtain relief from the United States Bankruptcy Court for the
Southern District of Texas (the
Bankruptcy Court) to facilitate the smooth operation of LVI's
business during the pendency of LVI's chapter 11 cases and other
risks and uncertainties relating to the chapter 11 cases, including
but not limited to, LVI's ability to obtain approval of the
Bankruptcy Court and the Canadian Court with respect to motions or
other requests made to the Bankruptcy Court and the Canadian Court
throughout the course of the cases, including with respect to its
CCAA DIP facility and intercompany DIP facility, the sale and
investment solicitation process, and the purchase agreement with
BMO or the consummation of the transactions contemplated therein,
the effects of the cases on LVI and on the interests of various
constituencies, Bankruptcy Court and Canadian Court rulings in the
cases and the outcome of the cases in general, the length of time
LVI will operate under the cases, risks associated with third-party
motions in the cases, regulatory approvals required to emerge from
chapter 11, the potential adverse effects of the cases on LVI's
liquidity or results of operations and increased legal and other
professional costs in connection with the cases.
LVI believes that its expectations are based on reasonable
assumptions. Forward-looking statements, however, are subject to a
number of risks and uncertainties that could cause actual results
to differ materially from the projections, anticipated results or
other expectations expressed in this release, and no assurances can
be given that LVI's expectations will prove to have been correct.
Additional risks and uncertainties include, but are not limited to,
factors set forth in the Risk Factors section of both (1) LVI's
Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and (2) any updates in Item 1A,
or elsewhere, in LVI's Quarterly Reports on Form 10-Q filed for
periods subsequent to such Form 10-K or any updates thereto.
Forward-looking statements speak only as of the date made, and LVI
undertakes no obligation, other than as required by applicable law,
to update or revise any forward-looking statements, whether as a
result of new information, subsequent events, anticipated or
unanticipated circumstances or otherwise.
Advisors
BMO Capital Markets and Morgan Stanley & Co. LLC are acting
as financial advisors and Torys LLP and Sullivan & Cromwell LLP
are acting as legal counsel to BMO.
PJT Partners LP and Alvarez & Marsal Inc. are acting as
investment banker and financial advisor, respectively, and Akin
Gump Strauss Hauer & Feld LLP and Cassels Brock & Blackwell LLP are acting as
legal advisors to LVI and LoyaltyOne.
SOURCE BMO Financial Group