Activist investor wants Parkland to sell or spin off Burnaby refinery
Global News
A U.S. activist investor has set its sights on Calgary-based Parkland Corp., urging the fuel retailer to consider selling or spinning off its Burnaby, B.C., refinery.
A U.S. activist investor has set its sights on Calgary-based Parkland Corp., urging the fuel retailer to consider selling or spinning off its Burnaby, B.C., refinery.
New York-based Engine Capital LP., which owns about a two per cent stake in Parkland, sent a letter to the company’s board on Wednesday. In the letter, Engine criticized Parkland for being “unable to translate its advantaged strategic position and quality assets into adequate returns for shareholders,” and said the company could achieve better performance by becoming a pure play fuel and convenience retailer and getting rid of non-core assets.
“We are particularly troubled by Parkland’s staggering underperformance compared to Canadian convenience retailer champion, Alimentation Couche-Tard,” Engine managing partner Arnaud Ajdler and partner Brad Favreau wrote, adding the investment fund proposes Parkland sell or spin off its Burnaby refinery as well as its heating oil and propane distribution businesses.
“We aware of several parties interested in these different assets,” they wrote.
Parkland purchased the Burnaby refinery — which refines 55,000 barrels per day of crude and synthetic oil into gasoline, diesel, jet fuels and more — from Chevron Canada for $1.5 billion in 2017.
In an emailed statement Wednesday, Parkland acknowledged the receipt of Engine’s letter. It said while it continues to work to enhance shareholder value, it is expecting to achieve record adjusted earnings in 2023 and has high confidence it can achieve its goal of reaching $2 billion in adjusted earnings by 2025 without further acquisitions.
“The company appreciates constructive shareholder input and will provide an update in due course,” Parkland said in its statement.
On the retail side, Parkland is one of the fastest growing independent fuel suppliers and marketers in North America, with a network of retail service stations across Canada, the northern U.S., and the Caribbean.
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