Currently, stockholders are being bombarded from all sides by reports coming from proxy advisors, telling them to agree, or, quite the opposite, vote against the elimination of such a structure, as the June 28 voting deadline approaches.
Two proxy advisors are going head to head in the matter. On one side, we have RiskMetrics, which recommended a vote in favor of the proposal, saying the benefits of a different structure far outweigh the costs. On the other hand, Glass Lewis & Co says it's better to vote against...
Of course, Magna officials tend to agree with the former's opinion, as the elimination of the dual share structure is pretty much what the company was aiming for when it decided to pay Stronach $863 million in cash and Class A shares for the Class B shares which he owned.
"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," Vincent J. Galifi, Magna's CFO said in a statement.
"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," he added.
The icing on the cake however remains the intention of the Ontario Securities Commission to block the deal. According to canadianbusiness.com, the Commission considers the move to be "contrary to the public interest and harmful to the integrity of the Ontario capital markets."
As said, the vote on the matter takes place on June 28, when the shareholders' meeting is scheduled to take place.
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