Parkland has once again responded to Simpson Oil, which owns approximately 20% of the company’s outstanding common shares, after Simpson issued a letter to fellow shareholders urging them to consider a change of leadership.
Simpson also nominated nine independent directors for Parkland’s board ahead of its May 6 shareholder meeting.
“The elements of of Parkland that attracted us in 2019 have been mismanaged out of existence … there is a fundamental obstacle to addressing these problems: Parkland’s entrenched leadership, which consistently prioritizes management interests over those of shareholders,” the letter read.
Following the letter to shareholders, Parkland CEO Bob Espey resigned in an attempt to quell Simpson’s concerns. Michael Jennings, former chair of the board, is slated to take over as executive chair, and Espey will remain in his current position until a new CEO is appointed, Parkland’s strategic review is completed or Dec. 31 — whichever occurs first, the company noted in a statement.
“Over the past few months, it became clear that stepping down and announcing my departure may help bring resolution to the situation with Simpson Oil Limited and benefit all shareholders,” Espey said at the time. “I remain deeply committed to Parkland and will support a smooth transition to new leadership. I look forward to working closely with Michael in his new role as executive chair.”
Recent Developments
Now, Parkland has published a presentation reaffirming the strength of its current proposed board, and refuting claims made by Simpson.
“This is a clear attempt by a minority shareholder to seize full control of Parkland without offering a control premium to its fellow shareholders — and without the experience or qualifications required to oversee a complex strategic review,” said Jennings. “The hand-picked Simpson dissident slate lacks independence, expertise and credibility. In contrast, Parkland’s board is highly independent, has significant and relevant expertise and is committed to advancing a thorough process that delivers value for all shareholders — not just one.”
Parkland cited the following five reasons for why it feels its board is more suited than Simpson’s to lead the company through its strategic review process:
- Belief that Simpson’s nominees lack experience
- Failure to pay shareholders a premium while assuming control
- A pattern of disregard for fiduciary duties to all shareholders
- Simpson’s focus is on itself, rather than all shareholders
- Parkland’s board is truly independent
“Over the past 12 months, Parkland’s board and management have engaged in numerous meetings and calls with the Simpson family, during which they made one thing unequivocally clear: they would accept nothing short of complete control of Parkland,” the company noted in its statement. “Their goal is to advance their personal financial interests at the expense of other shareholders.”
Parkland’s annual general meeting of shareholders will take place on May 6 in Calgary, Canada. Stay tuned for more updates from CStore Decisions.
