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Sunoco’s $7.7 Billion Bid for Parkland Faces Opposition from Engine Capital

Claiming the offer undervalues the company, Engine Capital intends to oppose the deal at the June 24 shareholder vote following what it calls an expedited sale process.

A Pioneer gas station is shown in Carleton Place, Ont., on Saturday, Nov. 8, 2008. THE CANADIAN PRESS/Sean Kilpatrick

Overview

  • Sunoco launched its $7.7 billion friendly takeover bid in early May, offering $44 per Parkland share in a mix of cash and its own stock.
  • Hedge fund Engine Capital, which owns 2.5% of Parkland, said on June 6 that the bid materially undervalues the company and criticized the board’s expedited sale process.
  • The deal is structured as a plan of arrangement requiring approval from two-thirds of votes cast but includes an option to convert into a takeover bid needing support from 50% of all outstanding shares.
  • Parkland operates over 4,000 fuel outlets, including the On the Run convenience store chain, and runs an oil refinery in Burnaby, British Columbia.
  • Simpson Oil, Parkland’s largest shareholder with a 19.8% stake, has yet to comment as a crucial June 24 vote approaches to decide the transaction’s fate.