Parkland Corporation has launched a strategic review that could result in a sale of the company.

The review, led by a special committee of independent directors, will explore various options to maximize shareholder value, including asset divestments, acquisitions, business combinations, and a potential sale.

“Parkland’s Board remains committed to acting in the best interests of all shareholders,” said Michael Jennings, Chair of Parkland’s Board of Directors. “While we are confident in the tremendous value creating potential of our business, strategic plan, and management’s ability to execute, the current share price does not fully reflect the intrinsic value of the Company. As a result, our Board believes the Strategic Review is a necessary step to explore opportunities to maximize value creation for all shareholders. We are openly inviting Simpson Oil to rejoin the Company’s Board and participate on the Special Committee.”

Goldman Sachs Canada and BofA Securities are serving as financial advisors for the process. Parkland cautioned that there are no guarantees the review will lead to a transaction and said it will keep shareholders informed as the process unfolds.

The strategic review comes after Simpson Oil, its largest shareholder, secured a key legal victory that removes restrictions on its ability to push for change at the Calgary-based fuel retailer.

Simpson Oil, which holds nearly 20% of Parkland, won a ruling from the Ontario Superior Court, freeing it from a 2019 governance agreement that had prevented it from engaging in activism or soliciting bids for the company. The decision could pave the way for a multi-billion-dollar sale of Parkland, the Globe and Mail reported.

In April 2024, Simpson publicly called for Parkland to explore a sale. Last summer, Parkland rejected an acquisition offer of nearly $8 billion from Texas-based Sunoco.

Parkland operates about 4,000 gas stations and electric-vehicle charging sites across Canada, the United States, and the Caribbean. The company also owns the On the Run convenience-store chain and M&M Food Market. Much of the company’s Caribbean network was acquired from Simpson when Parkland purchased the SOL refuelling-station chain in 2018 and 2022 for a combined $2.4 billion.

The relationship between Parkland and Simpson Oil has been fraught with tensions, according to the Globe. In late 2023, two Simpson-appointed directors resigned from Parkland’s board after just seven months, following the company’s refusal to name one of them as board chair, the Globe reported.

Simpson subsequently declared the governance agreement invalid, a position Parkland contested until the court ruled in Simpson’s favour.

Amid its dispute with Simpson, Parkland has also faced pressure from New York-based hedge fund Engine Capital, which owns about 2.5% of the company. Engine Capital has urged Parkland to cut costs and sell non-core assets, aligning with Simpson’s push for a sale.

Photo: Parkland Corporation