Parkland Corp.'s largest shareholder will no longer have a seat on the fuel retailer's board after the recent resignation of two board members. A boat travels past the Parkland Burnaby Refinery on Burrard Inlet at sunset in Burnaby, B.C., on Saturday, April 17, 2021. THE CANADIAN PRESS/Darryl Dyck

CALGARY - Parkland Corp.'s largest shareholder no longer has a seat on the fuel retailer's board after the recent resignations of two board members.

The Calgary-based company announced on Dec. 31 the resignations of Simpson Oil nominees Michael Christiansen and Marc Halley from Parkland's board of directors.

No reason for the resignations was provided, but Parkland said in a news release that its board has "unwavering confidence" in the company’s strategy and management team. It also said it is working with a global recruitment firm to fill the vacancies.

Going forward, Simpson Oil has waived its previously agreed-upon right to nominate two members to Parkland's board.

Simpson Oil is headquartered in the Cayman Islands and has been a Parkland shareholder for more than six years.

Since 2022, when Parkland consolidated its ownership of Sol, a Caribbean fuel retailer formerly owned by Simpson Oil, Simpson has owned about 20 per cent of Parkland shares.

Parkland says it is in discussions with Simpson about its shareholding in the company.

In a note to clients, RBC Capital Markets analyst Luke Davis said the board departures increase the likelihood of the Simpson family selling some shares over time.

"That said, we believe it remains in the Simpson family's best interest to manage potential sales strategically, though we have limited insight into their current thinking," Davis said.

The departures are unlikely to change Parkland's strategy, Davis added.

Parkland said it believes its strong stock performance is a "clear expression of our shareholders' support of Parkland's direction and strategy." Its share price increased by 39 per cent in 2023.

The company has made a number of changes to its business since last March, when U.S.-based activist investor Engine Capital LP publicly urged Parkland to get rid of what it called "non-core assets'' and become a pure play fuel and convenience retailer.

While Parkland rejected Engine's suggestion that it sell or spin off its Burnaby, B.C. refinery, the company has made other changes including putting a number of other assets, such as certain retail locations, up for sale and making changes to its board of directors.

In November, Parkland announced it would exceed its previously announced earnings guidance for 2023, something it attributed to favourable market conditions and the company's ongoing efforts to optimize its assets and operations.

Parkland's third-quarter adjusted earnings of $231 million were nearly five times its third-quarter 2022 adjusted earnings. The company will release its fourth-quarter financial results later this winter.

This report by The Canadian Press was first published Jan. 4, 2024.

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