In a launch posted on its web site on Monday, Sunoco LP introduced that it’s going to purchase Parkland Company in a transaction valued at $9.1 billion.
Sunoco famous within the launch that the events have entered right into a definitive settlement whereby Sunoco will purchase all excellent shares of Parkland in a money and fairness transaction. The deal consists of assumed debt, Sunoco highlighted.
Within the launch, Sunoco said that, beneath the phrases of the settlement, Parkland shareholders will obtain 0.295 SUNCorp items and C$19.80 for every Parkland share, “implying a 25 p.c premium primarily based on the 7-day VWAP’s of each Parkland and Sunoco as of Could 2, 2025”.
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Sunoco added that Parkland shareholders can elect, within the various, to obtain C$44.00 per Parkland share in money or 0.536 SUNCorp items for every Parkland share, “topic to proration to make sure that the combination consideration payable in reference to the transaction doesn’t exceed C$19.80 in money per Parkland share excellent as of instantly earlier than shut and 0.295 SUNCorp items per Parkland share excellent as of instantly earlier than shut”.
Sunoco highlighted within the launch that it has secured a $2.65 billion 364-day bridge time period mortgage for the proposed money consideration and mentioned the transaction has been unanimously permitted by the board of administrators of each firms. It’s anticipated to shut within the second half of 2025 upon the satisfaction of closing situations, together with approval by Parkland’s shareholders and customary regulatory and inventory change itemizing approvals, Sunoco famous within the launch.
As a part of the transaction, Sunoco intends to type a brand new publicly traded Delaware restricted legal responsibility firm named SUNCorp, LLC, Sunoco revealed within the launch.
“SUNCorp will maintain restricted partnership items of Sunoco which can be economically equal to Sunoco’s publicly traded frequent items on the idea of 1 Sunoco frequent unit for every excellent SUNCorp unit,” the corporate said.
“This new publicly traded entity can be handled as an organization for tax functions. For a interval of two years following closing of the transaction, Sunoco will be sure that SUNCorp unitholders will obtain the identical dividend equal because the distribution to Sunoco unitholders,” it added.
Outlining the “strategic rationale” for the deal within the launch, Sunoco famous “compelling monetary advantages”, “robust industrial logic”, and “accelerated accretive progress”. In a piece of the discharge headed “advantages to Canada and accountable stewardship”, Sunoco mentioned it would keep a Canadian headquarters in Calgary and “important employment ranges in Canada”. Wanting on the Burnaby refinery, Sunoco additionally famous that it’s “dedicated to persevering with to put money into Parkland’s progressive refinery, which produces low-carbon fuels, whereas sustaining protected, wholesome and rising operations for the long-term”.
Sunoco went on to state that it’s going to proceed to help Parkland’s plan to develop its Canadian transportation power infrastructure and mentioned the mixed firm’s expanded free money move will present further sources for reinvestment in Canada, the Caribbean, and america in help of each current and new alternatives.
‘Compelling Consequence’
In a launch posted on its web site on Monday, Parkland confirmed the settlement with Sunoco.
Parkland additionally famous in that launch that the proposed transaction can be effected pursuant to a plan of association beneath the Enterprise Firms Act (Alberta), which it mentioned is required to be permitted by an Alberta courtroom.
“The transaction would require approval by 66 2/3 p.c of the votes forged by the shareholders of Parkland,” Parkland said within the launch.
“The settlement additionally comprises an choice whereby Sunoco, at its election any time earlier than … [a meeting of Parkland shareholders on June 24,] could elect to impact and full the transaction on the identical phrases by the use of a take-over bid, which might require help from Parkland shareholders proudly owning not less than 50 p.c of Parkland’s excellent shares,” it added.
“The administrators and senior officers of Parkland, collectively holding 0.7 p.c of the Parkland shares, have entered into customary voting help agreements, pursuant to which they’ve dedicated to vote their frequent shares held in favor of the transaction,” it continued.
Along with shareholder and courtroom approvals, the transaction is topic to relevant regulatory approvals, together with approvals beneath the Funding Canada Act, approval of the itemizing of the SUNCorp shares to be issued beneath the Transaction on the NYSE, and the satisfaction of sure different closing situations customary for a transaction of this nature, Parkland said within the launch.
“Topic to the satisfaction of such situations, the transaction is anticipated to shut within the second half of 2025,” the corporate highlighted.
“The settlement consists of customary deal protections, together with fiduciary-out provisions, non-solicitation covenants, and the suitable to match any superior proposals, topic to Parkland paying a break charge within the quantity of $275 million in sure circumstances,” it went on to state.
Parkland famous within the launch that it intends to carry a particular assembly of Parkland shareholders on June 24, 2025, to approve the transaction.
“The annual basic assembly of Parkland shareholders, which was initially scheduled for Could 6, 2025, has been cancelled and can as an alternative be held on June 24, 2025, concurrent with the particular assembly … permitting Parkland’s shareholders sufficient time to totally consider the transaction and its advantages,” it added.
“Shareholders as of the document date of Could 23, 2025, can be eligible to vote on the assembly,” the corporate revealed.
“The present administrators have agreed to face for election on the upcoming assembly with a purpose to consummate the transaction, if supported by Parkland’s shareholders. These administrators have agreed to face down in favor of any various slate if the transaction will not be supported,” it added.
Parkland identified in its launch that, on March 5, 2025, the corporate introduced that its board of administrators had initiated a assessment of strategic alternate options geared toward figuring out alternatives to maximise worth for all shareholders.
“A particular committee of unbiased administrators … was appointed to supervise and lead this complete assessment,” the corporate mentioned.
“Following this announcement, discussions with Sunoco intensified considerably, resulting in the transaction,” it added.
“Primarily based on the unanimous advice of Parkland’s Particular Committee, and following thorough session with its monetary and authorized advisors, Parkland’s board of administrators has unanimously permitted the transaction,” it continued, noting that the board strongly recommends that shareholders vote in favor of the deal.
Within the launch, Michael Jennings, Govt Chairman of Parkland, mentioned, “this strategic mixture is a compelling consequence for Parkland shareholders”.
“The board unanimously recommends the proposed transaction, recognizing Sunoco’s dedication to safeguarding Canadian jobs, retaining the Calgary head workplace, and additional investing in Canada,” he added.
“This partnership creates important monetary advantages for shareholders and would place the mixed firm as the biggest unbiased gasoline distributor within the Americas,” he continued.
To contact the writer, e mail andreas.exarheas@rigzone.com
