Magna International Inc. shareholders who opposed ending the dual-class share structure of Canada’s largest auto-parts maker lost a court appeal of the decision.
The deal, approved by investors July 23, ends founder Frank Stronach’s control of the company he founded in 1969 and gives the Stronach Trust about $976.2 million in cash and shares, based on today’s closing price on the New York Stock Exchange.
The Ontario Superior Court of Justice dismissed the appeal from a group of Canadian pension funds in a ruling announced this afternoon. The group, including the Canada Pension Plan Investment Board, the country’s second-largest pension fund, said the plan gives Stronach, 77, an excessive payout. Magna sought a quick hearing because the agreement with the Stronach Trust could be terminated if it wasn’t approved by Aug. 31.
Canada Pension Plan won’t appeal the decision, Linda Sims, a spokeswoman, said in an e-mail. Deborah Allan, a spokeswoman for the Ontario Teachers’ Pension Plan, which was also opposed, wasn’t immediately available for comment.
Investors approved the restructuring with about 93 percent of the votes at the July meeting, and the company said about 75 percent of Class A shares voted were in support.
The proposal, developed by a committee of independent directors, calls for the Stronach Trust to get 9 million new Class A shares, or a 7.4 percent stake, for the Class B stock that now gives it about 66 percent of voting rights. The trust would also receive about $300 million in cash.
Magna fell $2.47 or 3.2 percent, to $75.13 at 4:15 p.m. in New York trading. The shares rose 49 percent this year.