July 13, 2010
Toronto - The Ontario Teachers' Pension Plan (Teachers') stated today that it still intends to vote against Magna's proposed transaction to eliminate the company's multiple-voting shares, indicating that the additional disclosure provided by Magna in its revised circular issued on July 9 does not provide any further assurance that the proposal is fair to subordinate voting shareholders.
"Alarmingly, none of the additional disclosure provides any comfort to Class A shareholders that Magna's board believes that the transaction is in the best interests of the organization," said Wayne Kozun, Senior Vice-President, Public Equities. "The revised proxy circular demonstrates that when faced with exactly the same information that shareholders now have through Magna's additional disclosure, the Special Committee and the board remained unable to make a determination themselves and refused to take a position, leaving it up to shareholders and the Court."
Teachers' believes that the cost of the proposed transaction is unprecedented and excessive at a 1,800% premium to the controlling shareholder. Moreover, if successful, the proposed transaction will eventually establish the same dual-class structure for the electric car (E-Car) venture that Magna is trying to eliminate through this transaction.
"While we support the principle of one share, one vote, Magna's proposed transaction sets a dangerous precedent for other Canadian firms with similar dual-class share structures," added Mr. Kozun. "We encourage the company to develop a proposal that is fair to all shareholders."
Teachers' analysis of the transaction and its subsequent comment on the additional disclosure is available on its website.
With $96.4 billion in assets as of December 31, 2009, the Ontario Teachers' Pension Plan is the largest single-profession pension plan in Canada. An independent organization, it invests the pension fund's assets and administers the pensions of 289,000 active and retired teachers in Ontario. For more information visit www.otpp.com.
Director, Communications and Media Relations
Ontario Teachers' Pension Plan