CALGARY – Parkland Corp.‘s biggest shareholder says it plans to vote in favour of the company’s planned takeover by U.S. heavyweight Sunoco LP, while another major investor said it won’t support the deal as it stands.
Simpson Oil, which owns almost 20 per cent of Calgary-based Parkland’s stock, said Friday that it plans to vote in favour of the cash-and-stock deal valued at US$9.1 billion including debt. The shareholder vote is set for June 24.
“As a long-term shareholder since 2017, Simpson Oil has been an advocate for the significant opportunities available to Parkland with a clear strategic direction overseen by capable leadership free of conflicts and self-interest,” Simpson said in a release.
“A combination with Sunoco will allow Parkland to benefit from operating under a first-class management team with a proven track record of value creation. This should address the lamentable governance and performance issues which have plagued Parkland for years.”
Simpson and Parkland have been locked in a boardroom battle for at least a year, with the Caribbean-based investor pushing for management changes and a formal review of strategic alternatives, including an all-out sale.
Parkland resisted the calls for several months, but ultimately decided to launch a review in March and announced the exit plans of CEO Bob Espey the following month.
Simpson Oil had aimed to overhaul Parkland’s board through a shareholder vote planned for May 6, but the Sunoco deal was announced the previous day and the meeting was postponed.
Meanwhile, New York-based Engine Capital, which owns 2.5 per cent of Parkland’s shares, released a letter Friday saying the Sunoco deal was rushed, the price is too low and there are likely better options available.
“We believe the board ran an expedited and flawed process at the wrong time, is providing insufficient information for shareholders to vote on the transaction and has accepted a price that undervalues the company,” wrote managing partner Arnaud Ajdler and partner Brad Favreau
“We intend to vote against the transaction as currently structured and hope others do the same.”
Engine’s leadership said in the letter they have nothing against Sunoco or its management team.
“We have great respect for both and would welcome the opportunity to become long-term investors in Sunoco if the transaction terms more accurately reflected Parkland’s intrinsic value,” wrote Ajdler and Favreau.
“Unless shareholders act collectively to vote down this transaction, the company will be sold in an inadequate deal that was hastily negotiated by a conflicted and lame duck board.”
Parkland owns the Ultramar, Chevron and Pioneer gas station chains as well as several other brands in 26 countries. It also runs a refinery in Burnaby, B.C.
The Globe and Mail has reported that Sunoco previously made an offer for Parkland in 2023 valued at C$45 a share, but was rebuffed. The current deal’s headline value is C$44 a share.
Engine suggested Sunoco revisit its earlier offer, which the activist hedge fund said still undervalues Parkland, but would better reflect what it has to offer.
Engine said it’s possible Parkland can fetch better value if pieces are sold separately and that its international segment in particular would be “coveted by multiple potential acquirers.”
This report by The Canadian Press was first published June 6, 2025.
Companies in this story: (TSX: PKI)
