CALGARY – A major shareholder in fuel refiner and retailer Parkland Corp. says it plans to vote against its planned takeover by U.S. heavyweight Sunoco LP.
Engine Capital owns 2.5 per cent of Parkland’s shares, making it one of the Calgary-based company’s biggest investors.
A month ago, Parkland and Dallas-based Sunoco announced a friendly cash-and-stock takeover deal valued at US$9.1 billion including debt. Shareholders are to vote on the transaction at a meeting set for June 24 in Calgary.
In a letter to Parkland’s board of directors published Friday, managing partner Arnaud Ajdler and partner Brad Favreau argue the Sunoco deal was rushed, the price is too low and that 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,” they wrote.
“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.
Engine’s letter is the latest salvo in the battle between Parkland’s management and some major shareholders.
For at least a year, Parkland has also been under pressure from its biggest investor, Caribbean-based Simpson Oil, which holds a roughly 20 per cent stake.
Simpson Oil had aimed to overhaul Parkland’s board at a shareholder meeting planned for May 6, but that meeting was postponed by more than a month after the Sunoco takeover was announced.
“Rather than allowing a new board to oversee a fair and transparent strategic review, the incumbent board hastily executed a sale in the final days of its tenure — without pursuing alternatives or maximizing value,” Engine said in its letter.
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)
