By Canadian Press

Activist calls on Parkland to buy back shares and reduce debt

Sep 26, 2023 | 7:02 AM

An activist investor that pushed for changes at Parkland Corp. earlier this year is making new recommendations such as prioritizing share buybacks.

In a letter to the Parkland board, Engine Capital commended the company on the work it has done so far including changes at the board and plans to sell non-core assets.

However, Engine Capital says Parkland remains undervalued and is making a number of recommendations including refining the company’s capital allocation, better aligning management compensation with shareholders’ interests and simplifying its operations.

It is calling on the company to allocate a total of around $800 million for share repurchases in 2024 and 2025 with repurchases front-loaded in 2024 to take advantage of the stock undervaluation.

It also suggests Parkland pay down debt over the next two years by a total of around $600 million primarily using proceeds from asset sales.

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Engine Capital says it owns about a 2.5 per cent stake in Parkland.

This report by The Canadian Press was first published Sept. 26, 2023.

Companies in this story: (TSX:PKI)

The Canadian Press