On Monday, May 5, 2025, a significant development in the Canadian fuel distribution industry unfolded as a judge ruled in favor of Parkland Corp., allowing the company to postpone its shareholder meeting by more than a month. This decision paves the way for investors to vote on a monumental US$9.1 billion takeover by Sunoco LP, a deal that promises to reshape the landscape of fuel distribution across the Americas.
The shareholder meeting, originally scheduled for May 6, 2025, has now been rescheduled to June 24, 2025. This meeting will not only address the election of the board of directors but will also include a vote on the cash-and-stock acquisition deal with Dallas-based Sunoco, which aims to create the largest independent fuel distributor in the Americas.
Justice Douglas Mah of the Alberta Court of King’s Bench stated that reinstating the original meeting date would be “impractical and confusing” for shareholders. His ruling came after Simpson Oil, which owns nearly 20% of Parkland’s shares, sought a court order to proceed with the shareholder meeting as planned. Simpson characterized Parkland's move as “deplorable,” accusing the company of attempting to “cling to power.”
Simpson Oil's criticism was echoed in a statement where they called for the resignation of 11 incumbent Parkland directors, including executive chair Mike Jennings. They argued that delaying the meeting while pushing forward with the transaction represented a breach of fiduciary duty and an attempt to sidestep shareholder will.
Sunoco's acquisition of Parkland is particularly noteworthy as it comes with commitments to maintain a Canadian headquarters in Calgary, significant employment levels in Canada, and ongoing investment in Parkland's refinery located in Burnaby, British Columbia. This commitment has been welcomed by Parkland's leadership, with CEO Bob Espey noting that the deal represents a “compelling outcome” for shareholders, delivering an attractive 25% premium.
Under the terms of the agreement, Parkland shareholders will receive 0.295 units of a new public company named SUNCorp along with C$19.80 for each Parkland share. Alternatively, shareholders can opt for C$44 per share in cash or 0.536 SUNCorp units. Analysts have indicated that if the deal is rejected, Parkland could potentially be sold in parts, as it remains uncertain who else would be interested in acquiring the company’s diverse assets.
Parkland, which operates gas station chains such as Ultramar, Chevron, and Pioneer across 26 countries, has faced ongoing scrutiny regarding its performance and governance. The company had previously rejected a takeover offer from Sunoco in 2023, which was valued at $45 per share. However, under pressure from shareholders, including Simpson Oil and activist investor Engine Capital, Parkland initiated a strategic review of its operations in March 2025, which ultimately led to the current acquisition proposal.
In a conference call following the announcement, Sunoco's CEO Joe Kim expressed confidence in the deal, stating, “For the Parkland shareholders, you get a very, very healthy premium, material cash, and a stronger company underlying the equity going forward.” Analysts from TD Cowen have suggested that a better offer is unlikely, emphasizing the strategic fit of Sunoco’s operations with Parkland.
As the market reacts to the news, Parkland's shares saw a notable increase of more than 5.5%, closing at C$38.28 on May 5, 2025. In contrast, Sunoco’s shares dipped by 5.8% as investors weighed the implications of the acquisition.
Looking ahead, the proposed transaction is subject to regulatory approval under the Investment Canada Act and requires the backing of at least 66 2/3% of Parkland shareholders. The special meeting on June 24 will provide shareholders with the opportunity to fully evaluate the transaction and its potential benefits.
The deal, which is expected to close in the second half of 2025, is anticipated to yield significant cost savings and enhance cash flow for the combined entity. Analysts predict that the merger will create a more robust company capable of navigating the competitive fuel distribution market while maintaining a strong commitment to Canadian operations.
In conclusion, the unfolding saga between Parkland Corp. and Sunoco LP highlights the complexities of corporate governance and shareholder interests in the fuel distribution sector. As stakeholders await the outcome of the upcoming shareholder meeting, the future of Parkland and its strategic direction remains a focal point of interest in the industry.
