Parkland shifts AGM to June 24 after US$9.1 billion Sunoco offer sparks court battle with top investor
Parkland Corp. has agreed to a US$9.1bn acquisition offer from US-based Sunoco LP, a transaction expected to create the largest independent fuel distributor across the Americas.
According to Reuters, Parkland’s board unanimously approved the deal, as reported by both companies on Monday.
As per the Financial Post, Sunoco will pay US$44 per share in cash and stock through a new public company, SunCorp LLC.
Reuters reported that the offer equates to US$19.80 in cash and 0.295 of a Sunoco unit per Parkland share, reflecting a 25 percent premium over Parkland’s seven-day volume-weighted average.
The deal, if approved, is expected to close in the second half of 2025 and deliver more than US$250m in annual cost savings by year three.
Sunoco also said the acquisition would increase cash flow by more than 10 percent and help the combined company return to target debt levels within 12 to 18 months after closing.
According to Reuters, Parkland’s largest shareholder, Simpson Oil, which owns nearly 20 percent of the company, called the agreement a “last-ditch attempt” by Parkland’s board to retain control.
Simpson had proposed a proxy slate for board elections and sought a court injunction to proceed with Parkland’s previously scheduled May 6 annual general meeting.
The Alberta Court denied this request the same day.
As per the Financial Post, Parkland cancelled its AGM and instead scheduled a special meeting for June 24, when shareholders will vote on the Sunoco transaction. If shareholders reject the deal, Parkland’s board will resign.
According to Parkland, if Sunoco believes the two-thirds approval threshold is at risk, it may pursue a takeover under the same terms requiring only a simple majority.
The transaction requires regulatory clearance under the Investment Canada Act, with potential scrutiny from national security and the Competition Bureau.
ATB Capital analyst Nate Heywood wrote in a research note that uncertainties around regulatory approval contribute to the current discount between Parkland’s share price and the implied value of the offer.
According to Reuters, Sunoco secured a US$2.65bn, 364-day bridge loan to finance the cash portion of the deal.
The Financial Post stated that this structure is typical for large transactions to bridge financing gaps.
Sunoco also committed to keeping Parkland’s Calgary headquarters, maintaining Canadian employment levels, and investing in the Burnaby refinery.
Reuters reported that Parkland has 4,000 retail and commercial locations in Canada, the US, and the Caribbean, while Sunoco operates 7,400 branded sites across the US, Puerto Rico, Europe, and Mexico.
If completed, the deal would transfer ownership of Parkland’s 55,000-barrel-per-day Burnaby refinery, which supplies 25 percent of British Columbia’s transportation fuel, to Sunoco.
Heywood told Reuters that “Sunoco is probably the most strategically positioned for this type of acquisition,” adding that asset alignment between the companies increases the likelihood of shareholder approval.
The Financial Post reported that Parkland posted net earnings of US$64m in Q1 2025, a turnaround from a US$5m loss a year earlier due to an 11-week shutdown at the Burnaby refinery.
Adjusted EBITDA increased by US$48m to US$375m year-over-year. However, the company also took a US$53m write-down related to its exit from California’s compliance markets.
Parkland CEO Bob Espey described the results as positive despite a “volatile” macroeconomic and regulatory climate.
The relationship between Parkland and Simpson Oil began in 2018 when Parkland acquired a stake in Simpson’s Caribbean fuel chain.
In 2022, Parkland assumed full ownership through a cash-and-stock deal that doubled Simpson’s stake in Parkland.
Disputes emerged over a standstill agreement that limited Simpson’s shareholder actions, culminating in a lawsuit and an Ontario court ruling that allowed Simpson to take on an activist role.
Reuters reported that Franklin Templeton’s Michael Shaw has not yet determined whether he will support the Sunoco offer, saying, “The market’s going to have to think about this.” He said he was considering whether a better alternative may emerge.
As per the Financial Post, Simpson Oil has not made any further public comments about the proposed deal since its court application was denied.
