Suncor to keep Petro-Canada stations in rebuff to activist investor

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Suncor Energy Inc. said it will keep its network of Petro-Canada fuel stations, a potential rebuff to activist shareholder Elliot Management LP, which has been agitating for a shakeup at the oilsands stalwart, including a possible sale of the Suncor’s retail business.

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But instead of a sale, Suncor’s board of directors said a “comprehensive review” prompted it to decide to “improve and optimize” Petro-Canada, promising changes that will lead to retail becoming a bigger contributor to Suncor’s bottom line.

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“After careful consideration, the board has concluded that retaining and optimizing the company’s retail business will generate the highest long-term value for shareholders and therefore, has unanimously decided to retain and continue to optimize the network and expand strategic partnerships for the Petro-Canada retail business that enhance our capabilities and capture increased revenue and cash flow opportunities,” board chair Mike Wilson said in a press release on Nov. 29. “Petro-Canada is a unique, differentiated, and strategic asset due to its strong national network and best in market consumer brand and loyalty program.”

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Elliott issued a public letter in April calling for a shakeup of the board of directors at the Calgary-based oilsands company. The U.S. investor publicly sought a review of management and assets, pointing to Suncor’s poor safety record in recent years, including an estimated 13 workplace deaths since 2014.

Chief executive Mark Little resigned in July after another Suncor worker died in a northern Alberta mine. The company said in its third-quarter earnings call on Nov. 3 that it would increase safety measures at its oilsands operations by reducing the number of contractors and upgrading its technology.