SIMPSON OIL LIMITED ISSUES PUBLIC LETTER TO BOARD OF PARKLAND CORPORATION

GRAND CAYMAN, Cayman Islands, Feb. 25, 2025 /CNW/ - Simpson Oil Limited ("Simpson Oil") has today sent a letter to the Board of Directors of Parkland Corporation ("Parkland" or "the Company").  The full text of the letter is reproduced below:

Parkland Corporation
240 4th Avenue SW Suite 1800
Calgary, AB T2P 4H4
Attention: Board of Directors ("the Board")

Dear Members of the Board,

RE: A return to value creation and good governance

Simpson Oil Limited ("Simpson Oil") is the largest shareholder of Parkland Corporation ("Parkland" or "the Company"), currently holding 19.8% of the outstanding common shares. We are writing to you to share our views on Parkland's future. We will release a copy of this letter publicly so that our perspective is available to all shareholders.

Parkland's ongoing weak performance raises significant concerns about the effectiveness of its current strategy and leadership. In our view, the market sees the Company the same way – the annualised 5-year total shareholder return is -3.1%¹, significantly  underperforming peers². Additionally, return on invested capital remains well below the cost of capital, reaching a 5-year low of 3.8% in the latest quarter³. Parkland's current strategy, including its 2028 financial targets, have yet to gain market confidence or provide a clearly defined path to shareholder value.

Shareholders may be concerned that leadership has not fully explored value-maximising strategic alternatives when opportunities arise. For example, reports⁴ of unsolicited takeover interest in the summer of 2023 suggested a transaction was available to shareholders at a material premium to Parkland's share price at the time and for most of the period since. If the Board rejected this takeover interest based on confidence in the Company's standalone plan, recent performance suggests a need for continued evaluation of whether this remains the best approach.

In April 2024, we publicly called for a strategic review, urging the Board to evaluate transparently and credibly value-creation opportunities for shareholders, including a potential sale or strategic transaction. Despite the Board claiming to remain "open to exploring opportunities that would deliver maximum value for shareholders"⁵, our request was dismissed over the course of a weekend. To our knowledge, there has been no indication of any meaningful analysis, investor feedback, or transformative opportunity that would justify this response.

In the following months, in an effort to avoid costly litigation, we repeatedly asked the Board to acknowledge that the voting restrictions and standstill provisions imposed by the Governance Agreement between Simpson Oil and Parkland had expired. The Board refused and stood by its public assertions that Simpson Oil was in violation of the Governance Agreement and threatened enforcement of the agreement. To dispel the uncertainty that Parkland had created, Simpson Oil was compelled to seek a judicial determination confirming that these provisions were no longer in effect. The Board then incurred significant sums litigating against us in an attempt to enforce those expired restrictions on our basic shareholder rights, claiming that we had resorted to "desperate legal maneuvering"⁶. Additionally, there have been public statements questioning our alignment with fellow shareholders, which we believe detracts from a focus on broader shareholder value – all while the share price has continued to decline.

The market's response to our court-adjudicated success in affirming our basic shareholder rights is telling – a 17% increase in the subsequent two trading days suggests the market is receptive to change at Parkland. This reinforces our view that a shift away from the current strategy, in alignment with our call for a strategic review, is necessary and overdue.

We are exploring all available options in pursuit of a pathway to value for the shareholders of the Company. In the coming weeks, we will provide details of our recommendations.

"Simpson Oil Limited"

Endnotes:

SOURCE Simpson Oil Limited