Parkland Corporation could be put up for sale after its largest shareholder, Simpson Oil, 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 on Monday, 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. Following Monday’s court ruling, Parkland’s stock surged nearly 10% on the Toronto Stock Exchange, reaching its highest level since July 2024.

“It’s hard to see how this isn’t good news for the shares,” Bank of Nova Scotia analyst Ben Isaacson wrote in a note to clients, the Globe reported. “An unencumbered debate about how to best surface value can now unfold in the court of investor opinion.”

Isaacson predicted Simpson would “become more vocal” about its plans for Parkland in the coming weeks, possibly by proposing a new slate of board candidates or advocating for an outright sale, according to the Globe.

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.

Parkland acknowledged the decision in a published statement.

“Parkland has always been open to representation from Simpson Oil on its board,” said Parkland. “This decision does not change that.”

The company said it remains focused on acting in the best interests of all shareholders to maximize value and executing its long-term strategy.

Parkland declined to comment further, and Simpson’s legal representatives did not respond to requests for comment from the Globe.

Simpson stake in Parkland generates tens of millions of dollars in annual dividends, according to the Globe. However, the Globe has previously reported that the Simpson family could earn significantly more if Parkland were sold to a master limited partnership such as Sunoco.

Amid its ongoing dispute with Simpson, Parkland is also facing 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.

“This is the same board that rejected a $45-per-share takeover offer without running a comprehensive strategic alternatives process,” Engine Capital managing partner Arnaud Ajdler said in an email to the Globe.

“These actions say a lot about the board’s priorities and the lengths it will apparently go to remain in power.”

Photo: Parkland Corporation