In This Article:
Parkland Corp.‘s largest shareholder says it is taking the company to court just hours after it was announced on Monday that the Calgary-based fuel and convenience retailer had reached an agreement to be acquired by rival Sunoco LP for US$9.1 billion.
Parkland cancelled plans to hold its annual general meeting (AGM) Tuesday and instead will hold a special meeting of shareholders on June 24 to approve the complex transaction, under which Sunoco is offering $44 a share through a combination of cash and stock in a new publicly traded company called SunCorp LLC, representing a 21 per cent premium to Parkland’s closing price Friday, according to Bloomberg.
But Simpson Oil Ltd., which holds about 20 per cent of Parkland’s shares, said it has applied for a court order to force the company to hold its AGM as planned on Tuesday, with a slate of new directors backed by Simpson poised for election to the board.
Simpson said more than 60 per cent of Parkland’s shareholders had voted in favour of its proposed slate of directors in votes submitted prior to the deadline last week, and called the Parkland board’s move to delay the AGM a “deplorable tactic” to cling to control.
“With a board transition imminent, no material action should have been taken until new, shareholder-supported directors were in place,” Simpson said in a statement on Monday. “Why is the board making major decisions when it’s already lost the confidence of shareholders?”
Simpson is also calling for the 11 incumbent Parkland directors, including executive chair Michael Jennings, to immediately resign.
Parkland has been locked in a bitter dispute with its activist shareholder in recent years over the company’s direction, with Cayman Islands-based Simpson Oil taking it to court last year in a lawsuit over shareholder rights.
Pressure from shareholders prompted Parkland chief executive Bob Espey to agree to step down later this year after 15 years at the helm of the company, which owns approximately 4,000 gas and convenience stores under the On the Run, Chevron and Fas Gas Plus banners, as well as the Burnaby Refinery in British Columbia.
Parkland said the deal with Sunoco was the result of a strategic review process it initiated last March.
If approved, the acquisition would create the largest independent fuel distributor in the Americas, according to Sunoco.
Sunoco would maintain a Canadian headquarters in Calgary and “significant employment levels in Canada,” the company said in a release Monday.