04:50 PM EST, 02/25/2025 (MT Newswires) -- Parkland Corp's ( PKIUF ) largest shareholder, closely held Simpson Oil, on Tuesday publicly released a letter to the board of the refiner and gas-stop operator, saying it is preparing to escalate its efforts to push for change at Parkland.

The letter comes after Simpson Oil, which holds a 19.8% stake in Parkland, won a legal victory earlier this month as the Ontario Superior Court ruled it is no longer bound by a 2019 governance agreement that prevented Simpson from engaging in any activism against Parkland or soliciting bids for the company.

In its letter today Simpson says, "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%, significantly underperforming peers. Additionally, return on invested capital remains well below the cost of capital, reaching a 5-year low of 3.8% in the latest quarter. Parkland's current strategy, including its 2028 financial targets, have yet to gain market confidence or provide a clearly defined path to shareholder value".

It added, "Shareholders may be concerned that leadership has not fully explored value-maximising strategic alternatives when opportunities arise. For example, reports 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."

According to Simpson, the market's response to its court win affirming its 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, it said.

Simpson added: "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."

Parkland shares closed down $1.02, or 2.7%, to $36.15 on the Toronto Stock Exchange.