Magna Closer to Dual Share Collapse


NEW YORK (TheStreet) -- Magna International (MGA) said that 75.28% of the auto supplier's class A minority shareholders have approved of its plan to eliminate the company's dual class share structure, an act that would pay 77-year-old founder Frank Stronach around $1 billion.

The plan has come under much criticism, as large pension funds protest the pay-off as unreasonable and question whether it serves in the interest of the public.

Magna is now waiting for the plan to be approved by the Ontario Superior Court at a hearing scheduled for August 12 and 13. "Certain shareholders have filed notices of appearance and Magna understands that those shareholders intend to present evidence and make arguments against the proposed transaction at the fairness hearing," the company said in a press release.

In a written statement, the Canada Pension Plan's investment board said that its "staunch opposition to the proposal has not changed and we are continuing to consider all measures available to us to oppose this transaction."

As part of the the dual class share structure elimination, Stronach would be relinquishing his controlling class B shares for 9 million new class A shares, $300 million in cash and voting control of a new electric car components joint venture between Magna and Stronach.

Magna stock has edged up 1.3% to $74.61 in midday trading.

-- Reported by Andrea Tse in New York

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