CALGARY, AB, April 15, 2024 /PRNewswire-HISPANIC PR WIRE/ — Parkland Corporation (”Parkland”, “we”, the “Company”, or “our”) (TSX: PKI), announced its determination that a strategic review is unnecessary and does not consider the best interests of the majority of our shareholders. Parkland’s Board of Directors (the “Board”) continuously evaluates opportunities to enhance and maximize shareholder value. The current call for a strategic review represents another attempt by Simpson Oil Limited (”Simpson”) to circumvent established corporate governance without considering the interests of all shareholders.
In 2023, while having nominees on our Board, Simpson solicited a potential sale of Parkland at a valuation significantly below the Company’s intrinsic value. The Company engaged legal and financial advisors and conducted a thorough evaluation of the proposed transaction. In addition, the Board established a special committee and engaged their own independent advisors.
“After careful consideration, the Board determined that pursuing this alternative would not serve the best interests of the Company and its shareholders,” said Steven Richardson, Chair of the Board. “Parkland’s Board fulfils its responsibilities for the benefit of all shareholders, not at the direction of one.”
Parkland provides additional context for its determination that a strategic review is unnecessary.
Simpson Reverses Its Position on Successful Parkland Strategy
Before Simpson withdrew its nominees from the Board, they participated in the development of Parkland’s strategy and plans, which following a period of significant acquisitions, are currently aimed at capturing synergies, driving organic growth, and enhancing shareholder returns. This strategy, and the clear and disciplined capital allocation framework it is built on, was presented at the Company’s 2023 Investor Day and received strong support from the majority of shareholders. The significant increase in share price through 2023 demonstrates the effectiveness of our current strategic focus.
Simpson is in Violation of Shareholder Governance Agreement
While the Board values and welcomes the perspectives of shareholders, it must act in the best interests of the Company and all of its shareholders. In accordance with this duty, the Company entered into a Governance Agreement with Simpson dated January 8, 2019 (the “Governance Agreement”) where Simpson agreed to a range of provisions to ensure that Simpson would not be able to exercise undue influence and control over Parkland in pursuing its own interests.
It has become clear that Simpson is disregarding its obligations under the Governance Agreement in a manner that negatively impacts shareholder and other stakeholder interests. Parkland will enforce the terms of the Governance Agreement while remaining willing to engage with Simpson. A copy of the Governance Agreement is available on Parkland’s SEDAR+ profile at www.sedarplus.ca.
Parkland is Committed to Maximizing Shareholder Value
Parkland’s Board always remains open to exploring opportunities that would deliver maximum value for all shareholders. The Board has endeavoured to engage in constructive dialogue with Simpson through personal meetings, calls, and correspondence, all grounded in the principles of fiduciary responsibility, proper governance, and acting in the best interests of all shareholders.
About Parkland Corporation
Parkland is an international fuel distributor, marketer, and convenience retailer with operations in 26 countries across the Americas. We serve over one million customers each day. Our retail network meets the fuel and convenience needs of everyday consumers. Our commercial operations provide businesses with industrial fuels so that they can better serve their customers. In addition to meeting our customers’ needs for essential fuels, we provide a range of choices to help them lower their environmental impact. These include renewable fuels sourcing, manufacturing, and blending, carbon and renewables trading, solar power, and ultra-fast EV charging. With approximately 4,000 retail and commercial locations across Canada, the United States, and the Caribbean region, we have developed supply, distribution, and trading capabilities to accelerate growth and business performance.
Our strategy is focused on two pillars: our Customer Advantage and our Supply Advantage. Through our Customer Advantage, we aim to be the first choice of our customers, cultivating their loyalty through proprietary brands, differentiated offers, our extensive network, competitive pricing, reliable service, and our compelling loyalty program. Our Supply Advantage is based on achieving the lowest cost to serve among independent fuel marketers and distributors in the hard-to-serve markets in which we operate, through our well-positioned assets, significant scale, and deep supply and logistics capabilities. Our business is underpinned by our people and our values of safety, integrity, community, and respect, which are deeply embedded across our organization.
Forward-Looking Statements
Certain statements contained in this news release constitute forward-looking information and statements (collectively, “forward looking statements”). When used in this news release, the words “aim”, “continue”, “will”, “would” and similar expressions are intended to identify forward-looking statements. In particular, this news release contains forward-looking statements with respect to, among other things, the evaluation of opportunities to enhance and maximize shareholder value, Parkland’s corporate strategy and plans, Parkland’s contractual rights and the enforcement thereof, including the terms of the Governance Agreement, and Parkland’s Customer Advantage.
These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These forward-looking statements speak only as of the date of this news release. Parkland does not undertake any obligations to publicly update or revise any forward-looking statements except as required by securities laws. Actual results could differ materially from those anticipated in these forward-looking statements as a result of numerous risks, assumptions and uncertainties including, but not limited to: general economic, market and business conditions; Parkland’s ability to execute its business strategy; action by other companies; and other factors, many of which are beyond the control of Parkland. See also the risks and uncertainties described under the headings “Cautionary Statement Regarding Forward-Looking Information” and “Risk Factors” in Parkland’s current Annual Information Form, and under the headings “Forward-Looking Information” and “Risk Factors” in Parkland’s Management’s Discussion and Analysis for the most recently completed financial period, each as filed on SEDAR+ and available on Parkland’s website at www.parkland.ca. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
