(Corrects to drop the word "upfront" from bullet 1 and
* 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
* To reduce CIBC's annual earnings by C$0.45/share on
Sept 16 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
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
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