MI Developments hires financial adviser, seeks shareholder consensus on reorganization proposal

By Lisa Kerner

Charlotte, N.C., Aug. 22 - MI Developments Inc.'s management retained GMP Securities LP to act as a liaison with shareholders in an attempt to develop a consensus on the company's reorganization.

Earlier in the month, MI Developments said it was hoping to reach a shareholder consensus regarding potential amendments to the March 31 reorganization proposal submitted by controlling shareholder Frank Stronach and his affiliates.

"I am confident that GMP will be very helpful to us as we continue our discussions with shareholders on a potential reorganization and as we continue to explore a range of alternatives with respect to our investment in Magna Entertainment Corp.," MI Developments vice chairman and interim chief executive officer Dennis Mills said in a company news release.

"Our number one priority is working to find solutions that are in the best interests of MI Developments and acceptable to all stakeholders," Mills said.

MI Developments cautioned there is no assurance that any reorganization transaction will be completed.

As previously reported, MI Developments made amendments to a September 2007 bridge loan provided to Magna Entertainment, giving the company additional time to explore alternatives with respect to its Magna Entertainment investment.

Stronach's reorganization 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 to an entity to be identified by the Stronach Group for $25 million in cash, a prior news release said.

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.

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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