NEW YORK (Reuters) - Auto parts company Magna International Inc’s proposed buyout of founder Frank Stronach’s controlling shares can go ahead, Canada’s Globe and Mail reported on Monday, citing a ruling by a three-member panel of Ontario judges.
The ruling dismisses an appeal from some of the country’s largest pension funds, the paper said.
Stronach is to get $863 million worth of stock under the deal that will see the 77-year-old entrepreneur give up his controlling, class B shares in return for 7.5 percent of the company’s class A shares.
He also gets $300 million in cash, control of a new electric car-parts joint venture between Stronach and Magna and four years of lucrative consulting fees.
In July, about three-quarters of Magna’s subordinate shareholders approved the deal to collapse the dual-share structure.
But at least six institutional shareholders, including four major Canadian pension plans, opposed it, calling the payoff to Stronach “unreasonable” and “fundamentally unfair,” and saying it set a bad precedent.
Magna was not immediately available for comment.
Reporting by Megan Davies; additional reporting by Euan Rocha in Toronto; editing by Andre Grenon