CORRECTED-UPDATE 1-TD to issue Aeroplan credit cards, CIBC to keep half of portfolio

Mon Sep 16, 2013 8:59am EDT
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(Corrects to drop the word "upfront" from bullet 1 and paragraph 2)

* 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 earnings

* To reduce CIBC's annual earnings by C$0.45/share on ongoing basis

Sept 16 (Reuters) - 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 retail spend.

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 Reuters I/B/E/S.   Continued...