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A fight is brewing between some Aimia Inc. directors and its largest shareholder over who will determine the company’s future, nearly one year after it agreed to sell the Aeroplan loyalty program to a group led by Air Canada.

Aimia said Monday it has added two new directors with a financial background, Dieter Jentsch and Fred Mifflin, bringing the size of the board to eight. The move was a surprise because the company held its annual meeting less than three weeks ago, on June 28; those meetings are the formal venue for electing directors, and it is rare to make appointments so soon after one.

The appointment of the new directors is seen as an effort to push back against the influence of Aimia’s largest shareholder, New York-based investment firm Mittleman Brothers, which owns 23 per cent. Mittleman was granted two seats as part of its activist campaign in 2018, and one of its partners said recently the firm is putting together its own slate of directors to be nominated to the board. The fund declined to comment.

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June’s annual meeting was marred by allegations that the chairman shut down questions from unhappy investors. Shareholders used their votes to register their dissent: Three of the six directors received less than 63 per cent of the shares voted. That’s a low number for a board election in corporate Canada, where it is common for directors to receive more than 90 per cent support from shareholders.

A major source of tension is how the company should proceed now that it has sold its major asset and has more than $475-million in cash and short-term investments available. In public remarks last week, Chris Mittleman of Mittleman Brothers said he is frustrated with management and the board. In a television interview, he said Aimia should pursue acquisitions outside the loyalty rewards market – a strategy that is directly at odds with management’s current plans – and said his fund was putting together its own list of directors.

He added that the fund only supported a number of the directors nominated at Aimia’s annual meeting in June because it was bound by a standstill agreement signed in 2018, when Mittleman became Aimia’s major shareholder and orchestrated its own board upheaval and management shakeup. That agreement expired July 1.

The fight also suggests that a rift has developed between Aimia’s chief executive officer, Jeremy Rabe, and Mittleman, even though the fund installed Mr. Rabe as CEO in May, 2018.

At the time, Air Canada had decided to pull out as Aeroplan’s lead partner, and Aimia was in distress. Mr. Rabe has a career in the loyalty rewards industry, and Mittleman hoped he could turn Aeroplan around. (Air Canada later had a change of heart and made a hostile bid for Aeroplan in July, 2018, which succeeded.)

Aimia did not respond to questions about a clash between Mittleman and the company’s board or its CEO, but in an e-mail, a spokesperson said the two new appointees have “stellar reputations in the business community” and “substantial expertise, particularly around capital allocation.”

Mr. Jentsch most recently served as the head of global banking and markets at Bank of Nova Scotia before retiring in 2018. Mr. Mifflin is currently a vice-chair and partner at boutique investment bank Blair Franklin Capital Partners and was previously an executive in corporate and investment banking at Bank of Montreal.

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In the e-mail, Aimia also noted that the appointments are “the result of a deliberate, rigorous and successful process carried out in compliance with good corporate governance practices. We previously publicly stated our commitment to continuously refresh and re-align the board with the company’s new strategic direction as a loyalty and travel-focused consolidator.”

Aimia has been in limbo for almost a full year since agreeing to sell Aeroplan to Air Canada last August for $516-million. Initially, Mittleman Brothers came out against the sale and argued that Air Canada would have to pay a hefty price, but it acquiesced a month after the hostile bid was made public.

Three months later, Air Canada announced a partnership with Toronto-Dominion Bank that saw TD agree to pay the airline $1-billion to remain the plan’s lead credit-card partner.

The sale closed in December, but Aimia has made little progress in developing or articulating a strategy for life after Aeroplan, which used to contribute about 80 per cent of its operating earnings.

Aimia shares closed at $3.89 Monday, down 54 per cent from the day before Air Canada announced in 2017 that it was pulling out as Aeroplan’s lead partner.

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