BMO Financial Group has signed a deal to acquire the Air Miles rewards program from LoyaltyOne, which has gone into bankruptcy protection.
Patrick Sojka, the founder of loyalty program portal Rewards Canada, says Air Miles has been in trouble for a while now.
"They've lost partners left, right and centre, not just the Sobey's group ... they lost Staples, they lost Old Navy, they lost Rona, Lowe's," he told CBC News in an interview. While Bank of Montreal is calling the deal a "made-in-Canada opportunity to enable a reinvigoration for one of Canada's largest loyalty programs," there is a chance that another suitor could emerge for Air Miles.
As part of the insolvency proceedings under Chapter 11 of the U.S. Bankruptcy Code and the Company Creditors' Arrangement Act in Canada, LoyaltyOne will undergo a sale process, one that could see a buyer other than BMO emerge with a better offer. But Sojka says that's unlikely. "There's no big partners outside of Bank of Montreal itself left in that program. And so without a lot of options for additional revenue ... it's less and less surprising that this is happening."Pete Evans is the senior business writer for CBCNews.ca. Prior to coming to the CBC, his work has appeared in the Globe & Mail, the Financial Post, the Toronto Star, and Canadian Business Magazine. Twitter: @p_evans Email: pete.evans@cbc.
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