CORRECTED-UPDATE 1-TD to issue Aeroplan credit cards, CIBC to keep half of portfolio
(Corrects to drop the word "upfront" from bullet 1 and paragraph 2)
* TD to pay C$162.5 mln to acquire CIBC's portfolio
* Deal to add C$0.10/share on adjusted basis to TD's 2014 earnings
* To reduce CIBC's annual earnings by C$0.45/share on ongoing basis
Sept 16 (Reuters) - Aimia Inc struck a deal with Toronto-Dominion Bank and Canadian Imperial Bank of Commerce under which TD will be the issuer of Aeroplan credit cards and acquire half of CIBC's existing portfolio, with CIBC retaining the rest.
TD said it would pay C$162.5 million ($157.2 million) to CIBC to acquire about 550,000 cardholder accounts, representing about C$3 billion in card balances and C$20 billion in annual retail spend.
Aimia said CIBC would retain the remaining 630,000 Aeroplan accounts held by existing banking customers.
TD said the deal, effective Jan. 1, would contribute 10 Canadian cents per share to earnings next year on an adjusted basis. On a diluted basis, it would reduce earnings by about 7 Canadian cents per share.
Analysts on average expect the company to earn C$8.42 per share in the year ending Oct. 31, 2014, according to Thomson Reuters I/B/E/S.
TD said it expects to complete the acquisition of CIBC's portfolio in December.
Earlier this year, Aimia said TD would replace CIBC as the issuer of the popular flight rewards card after Aimia and CIBC failed to reach an agreement to renew their contract.
CIBC has been the main issuer of the Aeroplan card for more than 20 years. The decision to divest this portion of the portfolio will reduce the company's annual earnings by 45 Canadian cents per share on an ongoing basis, CIBC said. (Reporting by Krithika Krishnamurthy in Bangalore; Editing by Kirti Pandey)
- Exclusive: Radar data suggests missing Malaysia plane deliberately flown way off course - sources
- Lost passenger jet was diverted deliberately: Malaysian PM |
- UPDATE 2-Satellite data shows missing Malaysia plane may have flown thousands of miles-source
- Malaysia PM says lost plane's movements indicate a deliberate act
- Investigators focus on foul play behind missing Malaysia plane: sources |