Magna International Inc. will abolish its dual-class structure and terminate founder Frank Stronach's control of the company upon shareholders' approval of a reorganization plan.
Canada's largest auto parts supplier said last Friday that shareholders accepted the plan with about 93% of the votes cast during a special meeting in Toronto. About 75% of Class A shares voted supported the plan. A hearing on Aug.
12 and 13 will take place to determine if the court approves of the plan. The deal gives $970 million in cash and shares to the Stronach Trust, based on Friday's closing price on the New York Stock Exchange in exchange for Stronach's agreement to cede control of the company.
Stronach, who controls the Stronach Trust and who founded the company in 1969, was absent during the meeting.
Mike Harris, a board member and chairman of the meeting, told reporters that a majority of shareholders voted that this is "a good deal." Magna's stock rose by 47% this year.
The Canada Pension Plan Investment Board had opposed the plan and said that the payout is excessive; however, Magna Chief Financial Officer Vince Galifi believes that eliminating the dual-class system will remove the discount at which companies with multiple- share structures trade. [via autonews]