From Canadian Press
AURORA, Ontario — Shareholders of Intier Automotive Inc. will get a chance to vote on a proposal by controlling shareholder Magna International Inc. to buy them out and take the subsidiary private but a financial adviser for Intier is advising against the deal.
The two auto parts companies said late Thursday that RBC Capital Markets, acting as financial adviser and independent valuator, has warned that the deal may not be in the best interests of Intier shareholders.
Under the proposal, shareholders of Intier would get either 0.41 of a class-A Magna share for each Intier share, or cash, based on the volume-weighted average trading price of Magna stock, the companies said in a release.
“The fair market value of the Intier class-A subordinate voting shares is in the range of $35 to $40 (USD) and the consideration under the proposed transaction is inadequate, from a financial point of view, to Intier minority shareholders,” the release said.
Intier’s shares closed at $36, up five cents, in Wednesday trading on the Toronto Stock Exchange. Magna’s class-A shares fell 35 cents to close at $94.65.
The management information circular and proxy statement is expected to go out to shareholders on or about March 7.
Word of the vote came one day after MI Developments Inc., another Magna spinoff, said it would let shareholders vote on a proposal to spin off its holdings in racetrack and entertainment company Magna Entertainment Corp.
Intier’s board said it will not recommend the privatization proposal from Magna either way, noting RBC’s report, the lack of liquidity of Intier’s class-A subordinate voting shares and the unlikelihood of any other third party offer for shareholders to consider.
Copyright 2005 Canadian Press. All Rights Reserved.
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