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CALGARY - A shareholder in Parkland Corp. is demanding a board shakeup as the Calgary-based fuel refiner and retailer looks into putting itself up for sale. 

Engine Capital LP, the New York activist hedge fund that owns 2.5 per cent of Parkland's stock, said in a news release Monday that the current board cannot be trusted to represent investors' best interests. 

Engine, along with major shareholder Simpson Oil, had been calling on Parkland to make major changes and weigh strategic alternatives, including selling the entire company. 

Parkland rebuffed that demand until earlier this month, when it said its intrinsic value was not reflected in its stock price and it would formally review options that also include a merger and asset sales or purchases.

"Given its track record of indefensible behaviour, we were not surprised to see the board suddenly announce a review of strategic alternatives — something it vehemently opposed previously — just two months before the 2025 annual meeting," Engine said in the news release. 

"The fact that Parkland’s stock rose merely six per cent on the news says it all: the market doubts the board’s true intentions, judgment and competence to run a true process."

Parkland did not immediately respond to a request for comment about Engine's latest remarks.

Its shares were up about two per cent in midday trading at $36.84 on the TSX. 

Engine is calling for an overhaul of the Parkland board, including the appointment of shareholder representatives and qualified independent directors.

"Parkland should not spend additional shareholder capital to resist overdue change," it said. "As a long-term investor in Parkland, we believe that the board should work with — instead of against — its largest shareholders to maximize value."

Engine accused the Parkland board of wasting shareholder money on a court case to try to prevent the company's biggest shareholder, Cayman Islands-based Simpson Oil, from voting against directors or any of their recommendations, providing its ownership was above five per cent. 

The restrictions on Simpson also included soliciting or making its own bid for the company. 

Simpson, which owns just under 20 per cent of Parkland's shares, sued last year to overturn those restrictions and in February the Ontario Superior Court of Justice found in its favour. Simpson directors resigned from the board amid the dispute. 

In announcing its strategic review on March 5, Parkland said it would invite Simpson Oil to rejoin its board and take part in the special committee that's reviewing possible moves to boost the share price. 

In its news release Monday, Engine said Parkland's board refused to engage with a "credible strategic party who reportedly submitted a premium takeover offer in the summer of 2023."

Engine also took aim at what it describes as Parkland's financial underperformance, weak engagement with shareholders and poor execution of asset sales. 

The fund said the board has failed to hold Parkland CEO Bob Espey accountable. 

"While nearly the entire senior management team has turned over during the last five years, Mr. Espey is still running the show after more than a decade of significant underperformance," it said. 

This report by ºÚÁϳԹÏÍø was first published March 17, 2025.

Companies in this story: (TSX: PKI)