Simpson Oil, which owns nearly a fifth of the c-store and fuel company’s shares, is the second major shareholder calling for operational changes.

Parkland denies latest shareholder push to explore a sale

Retrieved from Parkland.

Dive Brief:

  • Parkland Corporation has denied the request for a strategic review that was made last week by major shareholder Simpson Oil, according to an announcement from Parkland on Monday.
  • Simpson Oil said in a letter on Friday that Parkland should explore alternatives, including a potential sale of the company. Parkland countered that letter on Monday, noting that a strategic review at this time is “unnecessary and does not consider the best interests” of its shareholders.
  • This comes about a year after Parkland let Simpson choose two new members for its board after another shareholder pressured the retailer to split its c-store and fuel businesses amid long-term underperformance. After being elected, those members — Michael Christiansen and Marc Halley — left the board after eight months.

Dive Insight:

This back and forth marks the latest dispute in an ongoing disagreement between shareholders and Parkland’s leadership over the direction of the company.

Simpson Oil, which owns nearly one fifth of Parkland’s shares, said in its letter last week that considering a new direction, including new ownership, is “essential to optimize Parkland’s operational and financial performance.”

The shareholder noted that Parkland has underperformed the broader Toronto Stock Exchange by nearly 5% over the last five years. The disparity would be worse, Simpson said, if Parkland had not massively outperformed the index in 2023.

Parkland returned nearly 40% last year while the index returned around 8%, according to Yahoo Finance.

Parkland, meanwhile, pointed to 2023’s outperformance as proof that the company does not need to rethink its strategy. It noted in the announcement that after “a period of significant acquisitions,” the company is now focused on “capturing synergies, driving organic growth, and enhancing shareholder returns,” which it says led to the market-beating gains. 

The convenience retailer also accused Simpson of “disregarding its obligations” under a governance agreement the two companies entered into in 2019 to prevent Simpson Oil from using its large ownership to “exercise undue influence” over the company’s decisions.

This is not the first time Parkland and its shareholders have come into conflict. Activist hedge fund Engine Capital called for Parkland to split its convenience store and fuel segments into different companies in March 2023. Engine Capital also spoke out when Christiansen and Halley left the board earlier this year, noting that it was “very concerned” about them leaving the board.

  • Parkland names new board member as it once again faces investor pressure By Brett Dworski • Jan. 24, 2024
  • Parkland’s shareholder-chosen board members depart after 7 months By Brett Dworski • Jan. 2, 2024
  • Parkland stands firm amid increasing investor pressure By Brett Dworski • April 21, 2023

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