Activist investor Simpson Oil is backing Sunoco’s proposed major acquisition of fuel retailer and convenience-store chain owner Parkland Corporation.

But dissident shareholder Engine Capital plans to reject the proposed agreement.

Cayman Islands-based Simpson announced Friday that it plans to vote in favour of Sunoco’s offer $9.1-billion officer in cash, stock and debt at Parkland’s upcoming shareholder meeting. Simpson ranks as Parkland’s largest shareholder, owning a 19.8% stake.

For the past two years, Simpson has waged a boardroom battle with Parkland. The target firm owns and operates about 4,000 gas stations and electric-vehicle charging sites across Canada, the U.S., and the Caribbean. The company also owns the On the Run convenience-store chain and M&M Food Market, along with an refinery in Burnaby, B.C., which is among the last remaining refineries in Western Canada.

Sunoco has agreed to acquire Parkland through a friendly takeover for cash, shares and debt. The agreement came after Simpson won a key legal battle, enabling the firm to fight for a Parkland strategic review with options including the sale of the company.

“A combination with Sunoco will allow Parkland to benefit from operating under a first-class management team with a proven track record of value creation,” said Simpson in a news release.

“This should address the lamentable governance and performance issues which have plagued Parkland for years.”

But New York-based Engine notified Parkland that it will oppose the deal during the shareholder meeting in Calgary on June 24.

“In conclusion, 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,” wrote Engine Managing Director Arnaud Ajdler and Partner Brad Favre in a letter to Parkland’s board.

Engine released the letter public after sending it to Parkland.

“We intend to vote against the transaction as currently structured and hope others do the same,” wrote the Engine executives.

Engine called on Parkland to accept a higher offer that Sunoco made in 2023. In addition, Engine said it is “disappointed” that Parkland failed to disclose three analysts’ fairness opinions as part of proposed deal’s analysis.

Pictured: On the Run convenience store.

Photo: Parkland