AirAsia proposes to acquire remaining stake in BigLife

by ALIFAH ZAINUDDIN / pic by BLOOMBERG

AIRASIA Group Bhd has proposed to acquire the remaining 20% equity interest in BigLife Sdn Bhd for a price consideration of RM103.04 million.

The company, in a bourse filing yesterday, said it has entered into a binding memorandum of understanding (MoU) with Aimia Holdings UK II Ltd on the proposed acquisition of the remaining 1.66 million ordinary shares in BigLife not already held by AirAsia’s wholly owned subsidiary AirAsia Digital Sdn Bhd.

BigLife’s issued share capital is RM43.9 million, comprising 8.33 million shares. It is currently an 80%-owned subsidiary of AirAsia Digital.

It is principally engaged in the business of managing customer loyalty schemes, while its subsidiaries are involved in the marketing and distribution of loyalty programmes.

AirAsia said the RM103.04 million considerations for the shares sale will be satisfied via the issuance of 85.86 million new ordinary AirAsia shares, to be allotted and issued to Aimia at an issue price of RM1.20 per share.

AirAsia said it shall issue the consideration shares to Aimia on completion.

The purchase consideration was arrived at a willing-buyer and willing-seller basis, after taking into consideration the previous purchase consideration paid by Aimia in 2014 when it acquired its initial stake in BigLife, AirAsia said. The execution of the MoU does not require the approval of shareholders of the company, or any relevant authorities.

However, upon execution of the shares sale and purchase agreeement, the group will make a further announcement in accordance to Bursa Malaysia Securities Bhd’s Main Market Listing Requirements and will seek shareholders’ approval for the issuance of the consideration shares to be issued pursuant to the proposed acquisition at an EGM to be convened.

Toronto-listed Aimia, in an exchange filing, said the sale of its 20% equity stake in BigLife will see the company raise its stake in AirAsia to 121.47 million shares, equivalent to a 3.1% equity interest upon completion of the BigLife transaction.

It said the BigLife transaction is subject to the execution of definitive documentation and AirAsia’s shareholders’ approval, which is expected to occur before the end of May 2021.

Aimia CEO Phil Mittleman said by exchanging the company’s minority position in BigLife for publicly traded stock in AirAsia, Aimia will participate in what the group believes will be significant upside in AirAsia’s equity.

“We fully support the airline’s recent efforts to strengthen its financial position and pursue its digital transformation, and we believe that AirAsia will emerge from the pandemic as a stronger airline, uniquely positioned to capitalise on the sizeable pent-up demand that we believe exists for low-cost air travel across SouthEast Asia,” Mittleman said.

AirAsia group CEO Tan Sri Dr Tony Fernandes said the budget airline believes the transaction will be a great outcome for both parties.

“What started out as a standard airline rewards programme has now expanded to offer a much broader digital currency for consumers to earn and redeem BIG Points across a broad ecosystem of travel and lifestyle products, beyond AirAsia platforms.

“With the impending full ownership of BigLife and as AirAsia’s digital transformation continues, we look forward to taking BigLife to new heights,” he said.