An effort to block Tidewater Midstream and Infrastructure proposed acquisition of Tidewater Renewables now faces a substantially steeper voting hurdle after a cashless warrant exercise pushed pledged support to 49% of the shares eligible for minority approval.
Under the deal’s minority-vote rule, approval requires a simple majority of eligible votes cast. If every committed share votes yes, opponents would have to muster more than 49% of the entire eligible minority share base to stop it.
That equals more than 96% of the shares not already covered by support agreements, assuming no change in the voting base and no additional support.
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Before the exercise, committed investors controlled about 38% of eligible minority shares, implying opponents needed more than 61% of the uncommitted shares to defeat the proposal on the same assumptions.
The shift follows the November 5 exercise of all 4.4 million outstanding warrants, the company disclosed Thursday. Those warrants produced about 1.9 million shares without generating cash for Renewables.
Tidewater Midstream’s ownership of its subsidiary consequently fell to roughly 62% from 65%.
The warrants were not newly created for the takeover. A group of 3.375 million was issued in 2022 in connection with financing from Alberta Investment Management Corporation. Another one million were issued to an AIMCo affiliate in 2024 following a credit-facility amendment.
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AIMCo was among shareholders identified in the November 2 announcement as having agreed to support the combination.
The arrangement would exchange each Renewables share not owned by Midstream for 0.88 Midstream shares. When announced, it implied $20.58 per Renewables share and approximately $261 million in aggregate consideration, based on Midstream’s October 30 closing price.
On that unchanged reference valuation, the additional 1.9 million shares represent approximately $39.1 million of extra stock consideration.
The company also reported third-quarter adjusted EBITDA of $54.6 million, up from $16.4 million a year earlier, despite posting a $15.6 million net loss. Its accounts included a $38.7 million noncash loss from revaluing warrant liabilities, which were derecognized upon exercise after quarter-end.
The strengthened minority support is not formal approval. Renewables still requires two-thirds of votes cast overall and a separate simple majority of eligible minority votes. Midstream shareholders face their own votes, with court and TSX approvals also outstanding.
Both shareholder meetings are slated for December 14, with closing targeted for December 18.
