Second Parkland Shareholder Backs Call for Change
"To thrive in the public markets, a company must optimize its operations, capital allocation and governance," Engine wrote in a letter signed by Arnaud Ajdler, managing partner, and Brad Favreau, partner. "Regrettably, Parkland has fallen short in these key areas, resulting in its stock trading at a significant discount to peers, with a current valuation of only 6.6x 2024 EBITDA."
Engine pushed back against the company's 2023 stock performance as evidence of success, stating that "the reality is that the stock is where it was almost six years ago, and Parkland's multiple is close to an all-time low."
Engine noted its disappointment that Parkland rejected Simpson's call for a strategic review and questioned how the decision was made in just two days.
This isn't the first time the activist investor has urged change at Parkland. Engine Capital previously announced its intention to withhold support on all incumbent directors at Parkland's annual meeting in the spring of 2023. Later that year, it sent a letter to the company's board of directors that outlined several financial changes it believes the board should make and urged Parkland to focus on simplifying the business, as Convenience Store News reported.
In its latest letter, Engine Capital shared details of what it views as failures in operations, capital allocation and governance.
"As a result of the board's numerous failures, Engine has reached the conclusion that Parkland is unlikely to reach its full potential as a public company and should consider a sale," the investor wrote. "We believe a sale of Parkland is likely to result in superior value creation for all shareholders."
Calgary-based Parkland Corp. is an independent supplier and marketer of fuel and petroleum products and a convenience store operator. Parkland currently services customers across Canada, the United States, the Caribbean region and the Americas through three channels: retail, commercial and wholesale.