Tidewater Midstream Offers 0.88 Share for Each Tidewater Renewables Share, Valuing Minority Stake at C$261 Million

Tidewater Midstream and Infrastructure Ltd. has offered 0.88 of its own share for each share of Tidewater Renewables Ltd. that it does not already own, a deal worth about C$261 million to minority holders that goes to shareholder votes on Dec. 14.

The companies signed the arrangement agreement on Nov. 1 and announced it on Nov. 2. Closing is expected around Dec. 18, and either side can end the agreement if the deal has not closed by Feb. 1, 2027. Based on Midstream's Oct. 30 TSX close, the offer values each Renewables share at C$20.58.

For Canada's low-carbon fuels sector, the deal puts the country's first standalone renewable diesel plant on the same balance sheet as the Prince George Refinery next door, while Ottawa is still drafting the credit rules that will set the plant's returns.

Tidewater Midstream's offer sits above its own valuer's range

KPMG valued a Renewables share at C$19.92 to C$22.60 and a Midstream share at C$27.05 to C$32.00 as of Nov. 1. That implies an exchange ratio of 0.62 to 0.84, and the 0.88 on offer exceeds the top of it. KPMG gave a verbal opinion that the consideration is fair to Renewables minority shareholders, and National Bank Financial gave one to Midstream.

By Oil Authority's calculation, 0.88 is 4.8% above the 0.84 top of the range. Midstream expects to issue about 11.1 million shares, roughly 33% of its basic shares after closing, and Renewables would be delisted from the TSX.

Jeremy Baines, president and chief executive of Tidewater Midstream, framed the combination in the Nov. 2 release as "one company, one balance sheet, one strategy, one share." The combined company keeps the Tidewater Midstream and Infrastructure name and the TWM ticker.

Renewables needs at least 66 2/3% of votes cast, plus a majority of votes cast excluding Midstream and other excluded parties under MI 61-101. Voting support agreements covered about 38% of the shares eligible for that minority vote at announcement. Renewables said on Nov. 12 the figure rose to about 49% after warrants were exercised on Nov. 5, a step that also trimmed Midstream's stake from about 65% to about 62%.

Midstream shareholders vote the same day, and agreements already cover about 41% of its shares. National Bank of Canada Capital Markets and ATB Financial have given fully underwritten commitments for secured credit facilities to refinance existing debt.

Renewables' diesel plant ran at 114% of design in the third quarter

Renewables reported third-quarter adjusted EBITDA of C$54.6 million on Nov. 12, up from C$16.4 million a year earlier, on revenue of C$239.9 million. It still posted a net loss of C$15.6 million. The HDRD complex processed 3,411 barrels a day, or 114% of its 3,000 barrel a day design, against 2,011 barrels a day in the third quarter of 2025.

The company lifted its 2026 adjusted EBITDA guidance to C$165 million to C$175 million from C$130 million to C$140 million. More than 65% of forecast 2027 and 2028 renewable diesel output is under offtake agreements. Net debt stood at C$134.7 million at Sept. 30, or 1.04 times adjusted EBITDA.

Midstream published its own results the same day. Record adjusted EBITDA of C$96.9 million compared with C$16.2 million a year earlier, and it raised 2026 guidance to C$300 million to C$320 million from C$230 million to C$250 million. The Prince George Refinery ran at 11,798 barrels a day, 98% of design.

Midstream reports consolidated net debt of C$440.2 million and deconsolidated net debt of C$305.5 million. The C$134.7 million difference matches Renewables' reported net debt, which indicates the Renewables balance sheet already sits inside Midstream's consolidated figures.

Ottawa's draft credit multipliers shape the sustainable aviation fuel decision

The Department of the Environment published draft amendments to the Clean Fuel Regulations in the Canada Gazette, Part I, on Oct. 31. They would add a credit multiplier for eligible low-carbon fuels produced in Canada on or after Jan. 1, 2026, set at 1.8 for sustainable aviation fuel and 1.5 for renewable diesel. A 75-day comment period follows, and the Gazette notice gives no closing date.

Renewables has proposed a 6,500 barrel a day sustainable aviation fuel facility and said it is still assessing whether the 1.8 multiplier supports the economics. It moved its targeted final investment decision to the first half of 2027, and pre-FID work continues under a New Initiative Agreement with the Government of British Columbia.

If the vote passes, that decision on a plant of that size would fall to a single board and a single lender group, rather than to two boards with a related-party relationship.

Renewables expects to mail its management information circular to shareholders on or about Nov. 20, and both companies plan to hold their meetings on Dec. 14.