A Pioneer gas station in Carleton Place, Ontario, is seen on Saturday, November 8, 2008, in this photo taken by Sean Kilpatrick for The Canadian Press.
One of Parkland Corp.’s biggest investors is openly opposing its proposed US$9.1 billion merger with U.S.-based Sunoco LP. Engine Capital, which owns 2.5% of Parkland shares, says the deal undervalues the company and was pushed through too quickly without proper transparency or options being considered.
The merger, announced in May, involves a mix of cash and stock, with shareholders scheduled to vote on it at a meeting in Calgary on June 24. However, in a strongly worded letter addressed to Parkland’s board, Engine Capital’s managing partner Arnaud Ajdler and partner Brad Favreau expressed serious concerns.
They argue the deal was rushed during a period when the board’s credibility is already being questioned. “The board chose to sell the company during its final days instead of allowing a newly elected board to explore all available options,” Engine wrote.
While the firm emphasized it has no issue with Sunoco or its management, it believes the terms of the agreement fail to reflect Parkland’s true value. “We’d be happy to invest in Sunoco — if the offer were fair,” said Ajdler and Favreau in the letter. “As it stands, the proposal shortchanges shareholders.”
Parkland operates a network of recognizable fuel brands, including Ultramar, Chevron, and Pioneer, across 26 countries. It also runs a refinery in Burnaby, British Columbia. Given its wide reach and strategic assets, Engine argues that the company could potentially attract better offers or achieve more value if it sold off specific assets separately, especially its international operations.
Adding to the tension, Parkland has also faced pressure from Simpson Oil, its largest shareholder with a 20% stake. Simpson had been pushing for a major board shake-up at a meeting initially set for May 6. That meeting was delayed after the takeover was revealed, a move Engine Capital suggests may have been intentional to rush the deal through before the board’s tenure ended.
Last year, Sunoco had reportedly offered Parkland $45 per share — a proposal that was rejected. The current deal offers $44 per share, which Engine says still doesn't match the company's potential value.
In their letter, Ajdler and Favreau urge other shareholders to oppose the current deal structure. They fear that without a united stand, the company could be sold for far less than it’s truly worth.
Their message was direct: shareholders must speak now or lose out.
This latest development adds fuel to the ongoing clash between Parkland’s board and its major stakeholders, highlighting deep divides over how the company should shape its future.
