09:56 AM EDT, 03/22/2023 (MT Newswires) -- (Updates shares.)
Parkland (PKI.TO) was last seen up 6.3% after shareholder Engine Capital on Wednesday released a letter to the company's board of directors, encouraging them to begin a strategic review and sell off its British Columbia refinery and other assets in order to become a pure-play convenience store and gasoline retailer.
Engine, which owns a 2% stake in Parkland, said the company's shares are underperforming, particularly when compared to global convenience and gasoline retailer Alimentation Couche-Tard (ATD.TO).
"Parkland has been unable to translate its advantaged strategic position and quality assets into adequate returns for shareholders with total shareholder returns trailing relevant benchmarks and peers over every relevant time horizon (as detailed in the below table).1 It is worth noting that Parkland has underperformed both its convenience retailer and refinery peer groups over the 1-, 3-, 5- and 10-year periods. We are particularly troubled by Parkland's staggering underperformance compared to Canadian convenience retailer champion, Alimentation Couche-Tard," Engine Capital wrote.
The investor asks the board to begin a strategic review and a sale of what it considers non-core assets, selling or spinning out its Burnaby, B.C. oil refinery and its heating oil and propane distribution businesses.
"We are aware of several parties interested in these different assets. We acknowledge that such a sale is complicated by the need to structure a long-term contract since Parkland's fuel retail operations will continue to be a major customer of the refinery. We also acknowledge that there is potential tax leakage that must be evaluated," Engine said in its letter.
Engine Capital is also asking the company to retire board members that have served for more than 12 years and add directors with convenience merchandising experience and improve its management compensation practices.
Parkland has not yet responded to the letter.
Parkland shares, down 15% over the past 12 months, were last seen up C$1.65 to C$31.06 on the Toronto Exchange.
Price: 31.19, Change: +1.98, Percent Change: +6.78