Magna International on Tuesday said the Ontario Superior Court had approved its previously announced plan of arrangement to eliminate the dual class share structure and end founder Frank Stronach’s control.
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Shareholders had approved the plan at a 23 July special meeting in Toronto over the objections of some who said Stronach, 77, would get an excessive payout, Bloomberg News noted.
“Today’s decision by the Superior Court affirms our position that the claims of the dissident minority shareholders are without merit,” chief financial officer Vince Galifi said in a statement. “We believe that our shareholders, who by a large majority voted to support the proposed transaction, will be very pleased that the court respected and upheld their vote.”
The deal gives the Stronach Trust about US$984m in cash and shares, based on Monday’s closing price on the New York Stock Exchange, in return for ceding control of the company he founded in 1969, Bloomberg said.
The Canada Pension Plan Investment Board is disappointed with the ruling and will consider filing an appeal with other dissenting shareholders, spokeswoman Linda Sims told the news agency by email.
Investors approved the plan with about 93% of the votes at the July meeting, and the company said about 75% of class A shares voted were in support.
The proposal calls for the Stronach Trust to get 9m new class A shares, or a 7.4% stake, for the class B stock that now gives it about 66% of voting rights. The trust would also receive about $300m in cash.
“The decision of the Ontario Superior Court followed a hearing held on 12 and 13 August, 2010. The [court] found that the arrangement is fair and reasonable,” Magna said in its statement.
Magna added it did not know whether “certain dissident minority shareholders of Magna intend to appeal the decision” adding that an appeal usually must be filed within 30 days of the court’s decision.
