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Another shareholder is urging Calgary-based fuel retailer Parkland Corp. PKI-T to put itself up for sale.

New York-based hedge fund Engine Capital LP sent a letter to the company’s board of directors on Wednesday to express support for Simpson Oil Ltd.’s recent public request for a strategic review at Parkland.

Simpson Oil, which is Parkland’s largest shareholder with a 19.7-per-cent ownership stake, called last week for the company to consider new ownership in what represents the latest salvo in a months-long governance dispute between the company and its most prominent investor.

Parkland rejected Simpson’s call for a potential sale in a statement earlier this week that said a strategic review was unnecessary. Engine, which owns roughly 2.5 per cent of Parkland and had previously led an activist campaign to convince the company to cut costs and sell assets, said that “Parkland has failed as a public company.”

“We believe a sale of the company (in one or multiple transactions) is likely to result in a transaction at a price that is superior to the present value of the current strategic plan,” Engine said. “Parkland has simply not been able to achieve a proper valuation in the public markets.”

Parkland spokesperson Simon Scott declined to comment on the Engine letter.

Late last year, two Parkland directors appointed by Simpson Oil Ltd. – a family-owned business based in the Cayman Islands that is Parkland’s single largest shareholder with a nearly 20-per-cent ownership stake – resigned after just seven months on the board.

Michael Christiansen and Marc Halley left after Parkland refused to name one of them as the company’s chair, The Globe and Mail reported at the time.

Since those two resignations, Simpson Oil has declared its governance and board nomination agreements with Parkland to be invalid, though Parkland has repeatedly insisted they remain in place. According to Bank of Nova Scotia analyst Ben Isaacson, those two agreements prevented Simpson Oil from engaging in any activism against Parkland or soliciting bids to acquire the company.

In a note to clients published on Monday, Mr. Isaacson said he believes Parkland is now in play. It is possible that Simpson Oil could channel its large stake in Parkland into a hostile takeover bid, he said.

Parkland owns more than 4,000 gas stations and electric-vehicle charging terminals across Canada, the United States and the Caribbean, along with On the Run convenience stores. The company acquired most of its Caribbean presence from Simpson when it purchased the SOL refuelling chain in two transactions worth a combined $2.35-billion in 2018 and 2022.

Simpson obtained its ownership stake in Parkland through those transactions.

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