Tidewater Midstream and Infrastructure Ltd T.TWM

Strategic Review

[longrun86]

This may sound crazy, but if I were conducting the strategic review, my conclusion would be that the entire company should be sold off to different groups!

I will be very interested to see how this develops.

LR

[wynner]

Interesting. They value the new refinery and everything (HDRD) at close to a billion$ . That would be around $28 per LCFS share. They don't have debt if they sell the crown jewel.

[longrun86]

My view is that these "spin-off" businesses usually start with the intention to close a valuation multiple gap. The M&A guys sell it hard, the accountants and lawyers generate fees and go along for the ride... and then one day about a decade later someone with a brain wakes up and concludes it's a bunch of nonsense and the SpinCo is reaquired and returns to its rightful home

[wynner]

They would do well to raise cash from the gas side and buy up the LCFS shares whilie they are at a discount. Then scale up with SAF and renewable gas and Hydrogen. The scarcity premium could double the stock price . When they get going.

[longrun86]

I see them needing deeper pockets to pull off future aspirations. The company is undercapitalized relative to the opportunities it has and the balance sheet structure. Interest rates and cheap debt means that companies need to live a bit more within their means (I am still hoping Governments will figure this out too!). The shares have pulled back and are on sale in my mind.

[longrun86]

Sorry, I meant to say Low interest rates and easy debt (low lending standards)

[wordless]

Why doesn't Parkland just buy this thing?

[Possibleidiot01]

$650 million is far above current market cap . Subject to completion of customary conditions, AltaGas will acquire Pipestone and Dimsdale for total consideration of $650 million plus the assumption of power leases at Pipestone. The form of consideration will be $325 million in cash and $325 million in AltaGas common shares. Tidewater will receive approximately 12.5 million AltaGas common shares

[wynner]

Market cap less than $500 million. The renewable refinery is valued at $650 million + to TWM. What about the PGR and $95 crack spreads? Cheap or what?

[longrun86]

Great to see a deal coming together! The transaction consideration falls at the higher end of my valuation multiple expectations. It will be nice to get some further clarity on the application of the proceeds and in particular, the Altagas shares into cash. Overall, I am happy to see progress but there is still more to do to deal with the valuation gap and LCFS being a bit stranded. The shares