Engine Capital urges Parkland to consider sale, spinoff of non-core assets

March 22 (Reuters) - Activist investor Engine Capital on Wednesday urged fuel marketer Parkland Corp to look at strategic alternatives including the sale or spinoff of non-core assets to become a more focused fuel and convenience retailer.

"If the Board is unwilling to optimize the business in the public market, we believe the Board should consider a sale of the entire Company to either private equity or strategic buyer," Engine Capital, which owns about 2% stake in Parkland, said in a letter.

Parkland has accumulated a range of assets that are not typically owned by pure-play fuel and convenience operators, said Engine Capital.

"We believe these assets create significant complexity and detract from the company's underlying valuation leading investors to view Parkland as a conglomerate with disparate assets, instead of a pure play convenience retailer."

Engine added it was "particularly troubled by Parkland's staggering underperformance" compared to Canadian convenience retailer Alimentation Couche-Tard.

Parkland did not immediately respond to a request for comment.

Engine Capital added that Parkland could be worth C$45 per share if the board follows Engine's recommendations, which also includes adding directors with convenience merchandising and capital allocation experience.

The activist investor also urged the company to improve its compensation framework to better align management's incentives with shareholders' interests. (Reporting by Arunima Kumar in Bengaluru; editing by Eileen Soreng)