Magna International Inc., Canada’s largest auto-parts maker, will eliminate its dual-class structure and end founder Frank Stronach’s control of the company after shareholders approved a reorganization plan.
Shareholders accepted the plan with about 93 percent of the votes cast at a special meeting in Toronto, Magna said today. The Aurora, Ontario-based company said about 75 percent of Class A shares voted were in support. The plan is subject to court approval at a hearing Aug. 12 and 13.
The deal gives the Stronach Trust, controlled by Stronach, $970 million in cash and shares based on today closing price on the New York Stock Exchange in return for ceding control of the company he founded in 1969. Stronach, 77, did not attend the meeting.
A majority of shareholders voted that this is “a good deal,” Mike Harris, a board member and chairman of the meeting, told reporters as he left the venue. He declined to stay after the meeting and answer questions.
Magna rose 79 cents, or 1.1 percent, to $74.45 at 4:04 p.m. in New York Stock Exchange composite trading. The stock has jumped 47 percent this year.
While it was opposed by the Canada Pension Plan Investment Board, which said the payout is excessive, Magna Chief Financial Officer Vince Galifi said getting rid of the dual-class system will eliminate the discount at which companies with multiple- share structures trade.
