Farallon owns 8.3% of MI Developments

By Lisa Kerner

Charlotte, N.C., April 8 - MI Developments Inc. investors led by Farallon Capital Partners, LP bought 215,100 shares of the company's stock on April 2 and April 4 priced from $28.12 to $29.03 per share.

The transactions were reported in a schedule 13D filing with the Securities and Exchange Commission.

The investors beneficially own 3.83 million shares, or 8.3%, of the Aurora, Ont.-based real estate operating company.

On March 31, MI Developments said it received a reorganization proposal from various shareholders including its controlling shareholder, Frank Stronach of the Stronach Group. The goal of the reorganization is to return cash to shareholders.

Under the plan, holders of MI Developments' class A subordinate voting shares and class B shares would exchange their existing shares for $15.50 in cash and shares of a new public company, a prior MI Developments news release said.

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, the release said.

According to MI Developments, the proposal has received indications of support from shareholders owning more than 50% of the outstanding class A subordinate voting shares and some 95% of the outstanding class B shares.

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.

MI Developments reported that the proposed reorganization would be carried out by way of a court-approved plan of arrangement under Ontario law and would be subject to applicable shareholder and regulatory approvals.

A special meeting of shareholders to consider the proposal will be called by May 30, and MI Developments expects the transaction to close by July 30.

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