Two big pension plans came out swinging on Thursday against a plan that would pay the colorful founder of auto parts maker Magna International (MGa.TO) nearly $900 million to cede control, throwing up a possible road block to the deal.
David Denison, the chief executive of the Canada Pension Plan Investment Board, said Frank Stronach would get an "unreasonable" payoff for giving up control of Magna.
"Our view is it's too large a price," Denison told Reuters in an interview. The board manages pension funds for some 18 million Canadians and is one of the world's largest private equity investors. It holds almost 1 percent of Magna class A shares and is its 23rd largest shareholder.
The Ontario Teachers' Pension Plan, another big private equity investor and a minor Magna shareholder, will also vote against the proposal, under which Magna is offering the Stronach Trust $300 million in cash and about 7.5 percent of Magna to give up the class B shares that give the company founder control.
That would bring Stronach an $863 million payday.
Full story
