Magna Completes Dual Share Capital Reorganization

On August 31, 2010, Magna International Inc. completed its dual class share capital reorganization by way of plan of arrangement.

The reorganization resulted in the elimination of Magna's dual class share structure and the creation of a single class of equity securities in which all shareholders have a vote in proportion to their relative equity stake, each carrying one vote per share.

The closing of this high-profile deal, first announced on May 6, 2010, followed a long process as a result of having been vigorously contested by certain dissident minority shareholders, consisting of Ontario Teachers' Pension Plan, Canada Pension Plan Investment Board, OMERS Administration Corporation, Alberta Investment Management Corp., British Columbia Investment Management Corp. and Letko Brosseau & Associates.

In addition, in early June, the Ontario Securities Commission intervened by convening a hearing to determine whether to block the deal under its public interest jurisdiction.

Following a two-day hearing, the OSC issued an order requiring Magna to amend its proxy circular to provide certain additional disclosure before it could proceed with its proposed transaction, ultimately allowing the deal to go ahead.

In response to the order, Magna prepared a supplement to its proxy statement which was delivered to its shareholders and, subsequently, conducted its shareholder vote on July 23, 2010, at which disinterested minority shareholders approved the arrangement by 75.28 per cent of the votes cast at the special meeting of shareholders.

Following the successful shareholder vote, a fairness hearing on the Plan of Arrangement was held and, on August 17, 2010, following a two-day hearing, the Arrangement was approved by the Ontario Superior Court of Justice.

The decision to approve the Arrangement was appealed by the objecting shareholders, and on August 30, 2010, the Divisional Court upheld the approval of the Arrangement, thereby paving the way for the completion of the deal, which occurred on the following day.

Magna's legal team was represented in-house by Jeffrey Palmer, Executive Vice-President and Chief Legal Officer, Alon Ossip, Executive Vice-President, Bassem Shakeel, Vice President and Secretary, Joseph Cosentino, Legal Counsel, Gary Cohn, Vice-President, Mergers and Acquisitions and Jason Wolkove, Legal Counsel together with its advisors, Osler, Hoskin & Harcourt LLP represented by a team that comprised Jean Fraser, Emmanuel Pressman, Jeremy Fraiberg, Andrew Powers and Brooke Hales (corporate/securities); Firoz Ahmed and Amanda Heale (tax) and Mark Gelowitz, Larry Lowenstein, Laura Fric, Craig Lockwood, Jason MacLean and Lauren Tomasich (litigation).

The Stronach Trust was represented by Stikeman Elliott LLP, with a team that included Edward Waitzer and Brian Pukier (corporate/securities) and Peter Howard and Ellen Snow (litigation), and by Miller Thomson LLP, with a team that included James Proskurniak (corporate) and John Campbell and James Fraser (tax).

The Special Committee of independent directors of Magna was represented by Fasken Martineau DuMoulin LLP, with a team that included William Orr and Aaron Atkinson (corporate/securities); Mitchell Thaw (tax) and Samuel Rickett, Murray Braithwaite and David Hausman (litigation).

The Special Committee's financial advisor, CIBC World Markets, was represented in-house by Robert Richardson, together with its advisors, Davies Ward Phillips & Vineberg LLP represented by a team that comprised Vincent Mercier and Alexander Moore (corporate/securities) and Kent E. Thomson and James Doris (litigation).

Lawyer(s)

Jeffrey O. Palmer David A. Hausman Samuel R. Rickett Brooke Hales Ellen M. Snow Firoz Ahmed Jean M. Fraser Lauren Tomasich Amanda Heale Edward J. Waitzer James A. Fraser Mark A. Gelowitz Aaron Atkinson Craig Lockwood Emmanuel Pressman Larry P. Lowenstein Robert J. Richardson Laura K. Fric Gary M. Cohn Alon S. Ossip James A. Proskurniak Jason MacLean Jason Wolkove Jeremy D. Fraiberg Kent E. Thomson Vincent A. Mercier Murray J. Braithwaite Brian M. Pukier Peter F.C. Howard Mitchell L. Thaw John M. Campbell James W.E. Doris Andrew Orr J. Alexander Moore Bassem A. Shakeel Andrew Powers