MI Developments shareholders to vote July 24 on Stronach's reorganization plan

By Lisa Kerner

Charlotte, N.C., May 30 - MI Developments Inc. announced it will hold a special meeting of shareholders on July 24 to consider the reorganization proposal put forth by controlling shareholder Frank Stronach and his affiliates.

According to MI Developments, more than 50% of its class A shareholders and some 95% of its class B shareholders support the plan.

MI Developments noted that if approved, the reorganization proposal would be carried out by way of a court-approved plan of arrangement under Ontario law.

The plan of arrangement requires that at least two-thirds of the votes cast by each class of MI Development's shareholders be in favor of the plan at the special meeting, a company news release stated.

MI Developments said that a special committee of its board of directors is reviewing the proposal and has yet to make any recommendations or decisions regarding the plan.

Stronach's proposal calls for holders of MI Developments' class A subordinate voting shares and class B shares to exchange each of their existing shares for $15.50 in cash and shares of a new public company.

MI Developments would sell its controlling equity investment in Magna Entertainment Corp. to an entity to be identified by the Stronach Group for $25 million in cash, it was previously reported.

The new MI Developments would be owned 80% by the former public shareholders, 10% by an entity affiliated with Stronach and 10% by Magna International Inc. Its board of directors would consist of nine members: five nominated by the Stronach Group and Magna International and four nominated by the public shareholders, a prior news release stated.

Stronach's proposal has been under fire by at least two shareholders, Hotchkis and Wiley Capital Management, LLC and Greenlight Capital.

The Guardian Life Insurance Co. of America, a 9% shareholder, along with its affiliates entered into a support agreement with 2167951 Ontario Inc., a new Ontario corporation controlled indirectly by Stronach Trust and formed for the purpose of participating in MI Developments' proposed reorganization, it was announced on April 10.

MI Developments is an Aurora, Ont.-based real estate operating company engaged in the ownership, development, management, leasing and acquisition of industrial and commercial real estate properties located in North America and Europe.

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