Activist investor Engine Capital asks for refreshment of Parkland's board

(Reuters) - Activist investor Engine Capital warned Parkland Corp in a letter on Monday not to pursue "wasteful litigation with its shareholders" and instead collaborate with the largest of them to appoint independent board directors.

The activist investor said it was concerned about the recent departures from Parkland's board of Simpson Oil designees Marc Halley and Michael Christiansen, after being directors for eight months.

The reasons for the departures are unclear, but Engine's letter said a Simpson press release earlier this month signaled that Parkland’s single-largest shareholder was concerned about the board's commitment to corporate governance and prioritizing shareholders' interests.

Engine owns around a 2.5% stake in fuel marketer Parkland, which has a long-term debt of C$6.23 billion ($4.63 billion), as of Sept. 30, 2023.

"We believe that the current Board should not be responsible for its own refreshment process but should instead collaborate with its largest shareholders," Engine Capital's letter said.

"A newly refreshed Board with the experience we envision will be far better equipped to maximize value for Parkland’s shareholders and close the meaningful valuation discount that continues to exist."

Last year, the activist investor had asked Parkland to reduce its debt and announce new share buyback plans, along with looking at strategic alternatives including the sale or spinoff of non-core assets, to become a more focused fuel and convenience retailer.

Shares of Parkland were up 1%, to C$45.57.

($1 = 1.3453 Canadian dollars)

(Reporting by Roshia Sabu in Bengaluru; Editing by Pooja Desai)