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Aeroplan credit-card customers are finding themselves caught in the middle of a corporate spat, with Toronto-Dominion Bank sending mixed messages to its clients about Aimia Inc., the company that runs the airline-loyalty program.

After its joint takeover bid for Aeroplan was rejected last week, TD Bank warned its Aeroplan card holders that their points could be in jeopardy if a takeover isn’t completed. The bank suggested Aeroplan’s value will deteriorate if it is left as part of a stand-alone company.

The bank’s notice comes as its relationship with Aimia grows increasingly strained. TD teamed up with Air Canada, Canadian Imperial Bank of Commerce and Visa Canada Corp. to acquire Aeroplan in July, but the bid was rejected after the two sides swapped counteroffers. Although Air Canada led the takeover effort, TD is the dominant financial institution in the consortium because it is Aeroplan’s lead credit-card partner.

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“We have sought, but not received, assurances from Aimia that the Aeroplan program will deliver the value that we and you, as a TD Aeroplan credit-card holder, would expect from Aimia in the long term,” the bank wrote in its notice to card holders, which was also posted on its website.

TD declined comment for this story. Aimia could not be reached for comment.

TD’s tactic is unusual. Despite the failed takeover offer, the bank remains under contract with Aimia as Aeroplan’s lead financial sponsor until 2024.

“It’s a bit shocking to see,” said Robb Engen, who writes about the rewards industry for Rewards Cards Canada and is a TD Aeroplan credit-card holder.

“TD says, ‘We’re disappointed Aimia rejected this proposal and we’re now evaluating next steps.’ What does that mean?” he added.

Aeroplan’s future ownership, meanwhile, remains uncertain. Although takeover talks have broken off, the Air Canada-led consortium has not ruled out making another offer. At the moment, the two sides disagree on price. Before the bid was rejected, the consortium raised its offer price to $325-million from $250-million; Aimia demanded $450-million.

This week, TD’s actions were also called into question in a public letter from Mittleman Brothers, Aimia’s largest shareholder. The firm’s chief investment officer, Christopher Mittleman, criticized TD’s promotion strategy for Aeroplan cards.

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Early in 2018, Aimia’s chief financial officer had noted on a conference call that the company suffered somewhat from lower promotional spending on Aeroplan cards in the second half of 2017 − but did not name any promotional partners by name. TD holds the exclusive rights to mass-market Aeroplan Visa credit cards and, in his letter, Mr. Mittleman specifically called the bank out.

In doing so, Mr. Mittleman suggested that TD’s efforts were intentional, done “as we now see, in advance of trying to buy Aeroplan on the cheap. … The pattern of behaviours here is disconcerting to say the least,” he wrote

At the moment, Aeroplan’s most valuable members are frequent Air Canada flyers, largely owing to a deep-rooted relationship between the two companies that dates back decades. Aeroplan was originally built in-house at Air Canada in 1984, and although it was spun out in a 2005 initial public offering, the two have shared a long-standing contract that guarantees Aeroplan members 8 per cent of seats on every Air Canada route each month.

In May, 2017, Air Canada abruptly announced it would let its current contract with Aeroplan expire in 2020, which contributed to Aimia’s shares tumbling 63 per cent in a single day.

The news also affected TD Bank, which became the lead financial partner for Aeroplan in 2014, after former lead partner CIBC disclosed that it was mulling whether to let its Aeroplan contract expire. As part of TD’s deal, the bank agreed to a 10-year contract and paid Aimia $100-million up front − plus 15 per cent more per travel-reward point than CIBC paid under its old contract.

TD also paid CIBC $275-million over three years and CIBC was able to keep roughly half of the portfolio – but only those cards for which there was an accompanying CIBC banking product, such as a chequing account. National Bank Financial analyst Gabriel Dechaine estimates the program now delivers $400-million in profit to TD and CIBC combined.

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