AURORA, ON, June 15 /PRNewswire-FirstCall/ - Magna International Inc. (TSX: MG.A, NYSE: MGA) today reported that Glass Lewis & Co, a proxy advisor that is a wholly-owned subsidiary of Ontario Teachers' Pension Plan, has recommended to its institutional clients that they vote against a proposed transaction that would eliminate Magna's dual class share structure.
In its report, Glass Lewis writes,
"Overall, we agree that the elimination of the Company's dual class share structure would provide a variety of benefits for minority shareholders and better align the Company's equity ownership and voting power. We also recognize that the class B shares carry higher proportional voting rights and a number of other special features which suggest their value should exceed that of class A subordinate voting shares."
This report follows the report released yesterday by the independent proxy advisor RiskMetrics, which recommends that Magna shareholders vote in favour of the proposal on the basis that the potential benefits outweigh the costs.
Stated Vincent J. Galifi, Executive Vice President and Chief Financial Officer of Magna: "Unlike the RiskMetrics report which recommends in favour of the proposal, Glass Lewis made no final comparison of the potential costs versus benefits, including the anticipated trading multiple expansion, nor did the report caution investors over the potentially significant loss in trading value if the transaction does not proceed. Since the announcement of the proposal on May 6, 2010, despite the significant decline in the broader equity markets, Magna's shares have traded up 10.7% on the New York Stock Exchange (on which the greatest volume of trading has occurred) compared to a loss of 6.6% for the S&P 500 Index over the same period. On the Toronto Stock Exchange, the shares are up 11.8% compared to a loss of 1.8% for the S&P/TSX Index."
Mr. Galifi added, "We respect the right of shareholders and their advisors to debate the merits of the proposed transaction and we encourage all shareholders to read the proxy circular in its entirety and vote their shares at the special meeting. We continue to receive strong expressions of support for the transaction from significant class A shareholders who have the most at stake."
The Magna shareholder vote is scheduled to take place at a special meeting on June 28, 2010. Magna's Management Information Circular/Proxy Statement dated May 31, 2010 has been mailed to shareholders and is available on Magna's website at www.magna.com/magna/en/investors/ and at www.sedar.com.
We are the most diversified global automotive supplier. We design, develop and manufacture technologically advanced systems, assemblies, modules and components, and engineer and assemble complete vehicles, primarily for sale to original equipment manufacturers ("OEMs") of cars and light trucks. Our capabilities include the design, engineering, testing and manufacture of automotive interior systems; seating systems; closure systems; body and chassis systems; vision systems; electronic systems; exterior systems; powertrain systems; roof systems; hybrid and electric vehicles/systems as well as complete vehicle engineering and assembly.
We have approximately 74,000 employees in 240 manufacturing operations and 76 product development, engineering and sales centres in 25 countries.
FORWARD-LOOKING STATEMENTS --------------------------
This Press Release contains statements that constitute "forward-looking statements" within the meaning of applicable securities legislation, including, but not limited to, statements relating to the results and the potential benefits expected to be achieved from the completion of the transactions contemplated by the proposed Arrangement, including the increased marketability and improved liquidity of the Class A Subordinate Voting Shares of Magna and the potential for a reduction or the elimination of any dual class share structure discount associated with the market price of the Class A Subordinate Voting Shares of Magna. The forward-looking information in this Press Release is presented for the purpose of providing information about Magna's current expectations relating to the transactions contemplated by the Arrangement and such information may not be appropriate for other purposes. Forward-looking statements may also include statements regarding our future plans, objectives or economic performance, or the assumptions underlying any of the foregoing, and other statements that are not recitations of historical fact. We use words such as "may", "would", "could", "should", "will", "likely", "expect", "anticipate", "believe", "intend", "plan", "forecast", "outlook", "project", "estimate" and similar expressions suggesting future outcomes or events to identify forward-looking statements. Any such forward-looking statements are based on information currently available to us, and are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks, assumptions and uncertainties, many of which are beyond our control, and the effects of which can be difficult to predict, including, without limitation, risks, assumptions and uncertainties related to the consummation of the Arrangement, including, shareholder approval, Court approval, the satisfaction or waiver of the conditions to complete the transactions contemplated by the Arrangement, and the termination of the transaction agreements; future growth prospects for electric vehicles; the market value and trading price of the Class A Subordinate Voting Shares; and other factors set out in our management information circular/proxy statement dated May 31, 2010, our Annual Information Form filed with securities commissions in Canada and our Annual Report on Form 40-F filed with the United States Securities and Exchange Commission, and subsequent filings. In evaluating any forward-looking statements in this Press Release, we caution readers not to place undue reliance on any forward-looking statements. Readers should specifically consider the various factors which could cause actual events or results to differ materially from those indicated by our forward-looking statements. Unless otherwise required by applicable securities laws, we do not intend, nor do we undertake any obligation, to update or revise any forward-looking statements contained in this Press Release to reflect subsequent information, events, results or circumstances or otherwise.
SOURCE Magna International Inc.