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On Monday, BMO Capital analysts downgraded Parkland Corp stock from Outperform to Market Perform. This adjustment follows an acquisition offer from Texas-based Sunoco LP, valuing Parkland at approximately $9 billion. The proposal includes an optional mix of cash and shares.
Analysts at BMO Capital also reduced the price target for Parkland stock to Cdn$42 from Cdn$44. The revised target aligns with the equity offer price, considering Sunoco’s current trading price.
The analysts noted that Sunoco’s offer presents the best near-term outcome for Parkland shareholders. The acquisition proposal is seen as favorable, especially in light of ongoing shareholder concerns and recent operational challenges faced by Parkland.
BMO Capital highlighted that the pro forma yield of the deal is attractive, estimated at around 5%. This yield is expected to be a positive factor for shareholders considering the acquisition.
The downgrade reflects the analysts’ assessment of the acquisition offer’s impact on Parkland’s stock performance and future prospects.
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