When CEO Bob Espey announced he’d step down by year-end at the latest, we said the stage was set for a takeout and we got one Monday morning, with Sunoco offering $44 per share (25% premium) in a $9B deal.
Now it’s not the first time Sunoco has offered to buy PKI ($8B offer in 2023), given its heavy U.S. footprint could use some diversification from PKI’s Canada/Caribbean operations…
… but that’s not what’s interesting here. The announcement comes just a day before PKI’s now postponed AGM, where 20% shareholder and activist Simpson Oil was set to overhaul the board - essentially, the current board is giving them the finger.
Simpson tried the legal system to force the AGM, but was denied by an Alberta judge.
Delaying the meeting and pushing forward with any transaction ahead of board transition represents a clear breach of fiduciary duty - an obvious attempt to cling to power and sidestep shareholder will
Combine that with the potential for Canada to block a deal of this size, and it’s not hard to see why PKI shares closed >10% below the takeout price - this one is far from over.
For our first look at PKI, go here: https://www.bullpen.finance/content/54
