Air Canada (TSX:AC) Canadian Odd Lot Tender

The following is for informational purposes only and not meant to be investment, legal, or tax advice. Please consult a CPA or an investment professional.

Current Price: $28.81 (As of August 20, 2026 close)

Tender Range/Price: $29.00-$33.00 CAD

Tender Date: September 24, 2026

Odd lot provision: Yes

Tender offer size: $800m CAD

Tender Offer Announcement

Tender Offer to Purchase

Odd lot tenders & Canadian Shares:

Read my Guide to Odd Lot Tenders before attempting this or any other similar trades. See an excerpt from the guide that addresses Canadian tender offers also called substantial issuer bids.

“Canadian tender offers have unique tax considerations. Canada considers the difference between paid up capital and the tender clearing price a “deemed dividend” that requires brokers to withhold a 25% tax from US citizens with taxable brokerage accounts. In theory you can receive back the tax as a foreign tax credit, but it can complicate your tax return. US Individual Retirement Accounts (IRAs) are supposed to be exempt from withholding based on tax treaties between the two countries, but allegedly many brokers in practice continue to withhold the tax and getting the tax refunded from the broker is a nightmare. Interactive Brokers is one notable exception to this rule. In my experience if you purchase Canadian shares on Canadian exchanges in Canadian dollars and tender in an IRA, Interactive Brokers will generally not withhold tax from the tender proceeds. However, I have heard that if you buy a US ADR of a Canadian company that is cleared in the US that they still may withhold the tax. I have not attempted the latter, but can confirm that I have received full proceeds from Canadian tender offers that were purchased in Canadian dollars on Canadian exchanges in Canadian dollars in an IRA held at Interactive Brokers.”

For this tender offer the paid-up capital is  $10.60 CAD per share.

The trade:

Buy 99 shares of Air Canada (TSX:AC) below the bottom of the tender range ($29.00 CAD). Tender your shares at the bottom of the tender range ($29.00 CAD). Your profit is the difference between your purchase price and the ultimate tender price.

Unique considerations:

See “Odd lot tenders and Canadian shares” above.

Repurchase history:

This is only the second substantial issuer bid (tender offer) that Air Canada has done in the last decade. During the last substantial issuer bid Air Canada largely stayed near or above the bottom of the tender range ($18.50 CAD) which resulted in little potential profit for odd lot buyers.

Risks:

Outside of the tax implications listed above, this is medium risk tender offer due to the present macroeconomic and geopolitical backdrop in Canada.  

The tender has “certain conditions of the offer” present in section 7, pages 11-14 of the Tender Offer Statement that would allow the company to terminate the tender offer. The majority of the conditions are fairly standard. A few of the conditions that would allow the company to terminate include:

• Any material change in short-term or long-term interest rates. This gives Air Canada considerable room to cancel as a material change is not defined.
• “any change or changes (or any development involving any prospective change or changes) in the general political, market, economic or financial or industry conditions that, in the sole judgment of Air Canada, has or may have a material adverse effect on Air Canada’s or its subsidiaries”
• if there is “any decline in any of the S&P/TSX Composite Index, the Dow Jones Industrial Average or the S&P 500 by an amount in excess of 10%, measured from the close of business on August 17, 2026.” The S&P/TSX Composite Index closed at ~36,667, the Dow Jones Industrial Average at ~53,460, and the S&P 500 at ~7,745 on August 17^th.

Unlike other companies, Air Canada operates in a highly cyclical industry that can have significant fluctuations in price based on jet fuel pricing and economic conditions. In addition, Air Canada’s stock could move significantly on tariff related news given the current negotiations between the USA and Canada.  I am waiting for a lower entry point so I make at least a few hundred dollars per eligible account on the tender.