The Ontario Superior Court has approved Magna International Inc.'s proposal to pay founder Frank Stronach nearly $1 billion to relinquish control of the company.
In a statement to the media, Magna said that its plan to "eliminate Magna's dual class share structure" has been approved by the court. Under the deal, Stronach will give up his controlling, class B shares in the company.
In return, he will get 300 million new class A shares, $300 million in cash, control of a new electric car-parts joint venture between Stronach and Magna, and four years of lucrative consulting fees. It was reported last July that about three-quarters of Magna's subordinate shareholders approved the deal.
However, it faced opposition from three prominent Canadian pension plans and other institutional investors who said that the payoff to Stronach set a bad precedent and further described it as "unreasonable" and "fundamentally unfair."
Magna's dissident minority shareholders have 30 days to file an appeal. In a statement, Magna Chief Financial Officer Vincent Galifi said that the Superior Court's decision affirms their position that the dissident minority shareholders' claims don't have merit. [via autonews]