Shares in Magna International Inc. were up nearly 2% in morning trading on the Toronto Stock Exchange Wednesday after a top executive said a majority of Class A shareholders have already voted to support the automakers’ controversial share restructuring plan.
Roughly 54% of all outstanding Class A shareholders have chosen to support the proposed transaction, Magna chief financial officer Vincent Galifi told Reuters.
Under the deal, the Aurora, Ont.-based company would give founder and chairman Frank Stronach $300 million US in cash and nine million new shares to eliminate the dual-class voting structure that has allowed Stronach to steer Magna for decades with only a minority stake.
The Ontario Securities Commission is holding a hearing Wednesday to decide whether to block the arrangement after several institutional shareholders, including the Canadian Pension Plan Investment Board and the Ontario Teachers Pension Plan, complained Stronach was being paid a more than 1,800% premium to cede voting control of the company.
The transaction was devised to reduce, even eliminate, the discount at which Magna stock tends to trade. It also frees up Stronach to focus on the company's new electric vehicle offshoot business, one that he says needs a strong leader.
The deadline for shareholder voting is June 28.
--With files from Reuters
