06:37 AM EDT, 09/03/2024 (MT Newswires) -- Parkland (PKI.TO) on Tuesday said it will sell its Florida-based retail and commercial businesses within the next 12 to 18 months as the company faces a legal battle with majority shareholder, Simpson Oil, which wants Parkland under new ownership.

Simpson Oil owns about 20% of Parkland shares but no longer has a seat on its board after the resignation of two Simpson-nominated directors late last year.

Parkland said Tuesday's announcement represents the "continued execution" of its strategy laid out in November, with the company expecting to double cash flow per share to $8.50 and grow adjusted EBITDA to $2.5 billion by 2028 through continued organic growth, lower costs and optimized supply advantage.

"This disposition reflects our commitment to direct capital towards our highest return opportunities and maximize shareholder value," said Bob Espey, president and CEO, Parkland. "We remain deeply committed to our northern U.S. business, which is performing well and has strong connectivity with Canada."

Parkland said that while its Florida improvement plan is on track, the company has more accretive investment opportunities that can deliver stronger financial returns and growth.

It added: "Parkland remains focused on improving returns and increasing cash flow through disciplined capital allocation. By divesting non-core assets, the company continues to focus on areas with the highest growth potential and strongest synergies with its core business."

Parkland's Florida business comprises approximately 100 retail locations, nine cardlock facilities and four bulk storage plants and warehouses. The company said early indications show substantial interest in its Florida assets, and it expects to complete this disposition within the next 12 to 18 months.

Parkland said the announced sale of Parkland's Florida business is part of its previously announced non-core asset divestment program which the company now expects will significantly exceed $500 million by the end of 2025.

The company expects to close the previously announced sale of its Canadian propane business in the fourth quarter of 2024. This disposition includes estimated cash proceeds of $115 million and an exclusive long-term supply contract with the new owner.

All of this comes after Parkland last month said it is "surprised and disappointed" by Simpson Oil's initiation of litigation related to a 2019 governance agreement. Parkland rejected the what it called "a routine turnover in the management team over the past five years" led to a change that would relieve Simpson Oil of its obligations under the companies' governance agreement.

"This desperate legal maneuvering is without precedent," Parkland said.

Simpson Oil opened an application with the Ontario Superior Court of Justice seeking a declaration that the standstill and voting restrictions under the governance agreement had ceased to apply due to a material change in the composition of Parkland's senior management in 2019. The governance agreement was part of a transaction in which Parkland acquired 75% of SOL Investment, resulting in Simpson Oil becoming a large Parkland shareholder.

Parkland said it has made progress on several matters of concern to Simpson Oil, including the transition to a new chairman, Michael Jennings, and ongoing board renewal, with three new director appointments. Parkland said it also remains willing to terminate the governance agreement and reappoint two Simpson Oil nominees to the board.