Simpson Oil slams Parkland Board for “clinging to control” after $9.1B Sunoco deal

Investing.com -- Simpson Oil launched a scathing rebuke of Parkland Fuel Corporation’s (TSX:PKI) board on Friday, accusing directors of delaying a shareholder vote in a bid to push through a $9.1 billion takeover by Sunoco LP (NYSE:SUN). The move, Simpson claims, is a “clear breach of fiduciary duty” and an effort to avoid accountability to shareholders who had lined up behind a board overhaul.

The Cayman Islands-based investment firm, which owns 19.8% of Parkland’s outstanding shares, released the statement hours after Sunoco’s acquisition offer was made public. “Shareholders have spoken – they have lost faith in the current board,” Simpson said, adding that over 60% of shares had been voted using its alternative “GOLD” proxy card supporting new directors.

According to Simpson, Parkland’s board postponed its May 6 annual general meeting in order to couple the director election with a shareholder vote on the Sunoco transaction. In response, Simpson announced it would seek a court order from Alberta’s Court of King’s Bench to proceed with the meeting as originally scheduled.

The Sunoco offer, valued at C$44 per Parkland share, arrives after months of mounting pressure from activist investors, including Simpson and Engine Capital. The Parkland board had retained Goldman Sachs (NYSE:GS) and BofA Securities to conduct a strategic review earlier this year amid weak financial performance and investor frustration with former CEO Bob Espey.

That pressure culminated in Espey’s resignation in April and the nomination of nine new directors by Simpson Oil. The Sunoco deal, struck just days before the scheduled vote, now appears as a defensive maneuver aimed at wresting control of the company’s fate before new leadership could be elected.

Simpson specifically named Executive Chair Mike Jennings, accusing him of “value destruction and a prolonged battle” with shareholders. “This eleventh-hour maneuver represents a new turn in the Board’s deplorable track record of governance,” the firm wrote, calling for the immediate resignation of all 11 incumbent directors.

Parkland had been on the radar of suitors before; Sunoco made an $8.1 billion offer in 2023 that was rejected. With boardroom upheaval looming, the improved 2025 offer suggests a well-timed attempt to preempt shareholder intervention.

The controversy now casts a shadow over a deal marketed as transformational. While the merger would create the largest independent fuel distributor in the Americas, joining Parkland’s Canadian and Caribbean footprint with Sunoco’s U.S. infrastructure, Simpson’s legal challenge may delay or derail its timeline.

With the AGM’s fate now in court and proxy votes largely cast, Parkland’s next move could determine whether the acquisition proceeds or is revisited under a reconstituted board.

This article first appeared in Investing.com