FAIR Canada Newsletter
June 2010 |
FAIR Canada Calls on OSC to Stop Magna Deal |
Greetings!
FAIR Canada is seeking intervenor status today from the Ontario Securities Commission (the "OSC" or the "Commission") for the June 23, 2010 proceeding involving Magna International and the Stronach Trust. It is FAIR Canada's position that the proposed transaction is contrary to both the public interest and the best interests of investors generally, as well as an abuse of the Canadian capital markets. The proposed Magna transaction is based on an acquisition from an insider, at an excessive premium and with little evidence of any form of arm's-length, independent valuation that would be reasonable for a transaction of its size. The proposed deal allows the controlling shareholder to effectively determine the value of his control block shares, without any fair valuation process, at a price that is unlikely to ever be received from an outside acquirer through an arm's-length take-over bid. If granted intervenor status, FAIR Canada will provide the Commission with its perspective on the effect the transaction will have on the integrity of the Canadian capital markets.
FAIR Canada Calls for Action by the OSC and Institutional Investors On June 15, 2010, FAIR Canada called on securities regulators and market participants to rally to protect the integrity of the Canadian markets.
Urgent Public Hearing - FAIR Canada called on the OSC to convene a public hearing into the Magna Transactions under section 127 of the Securities Act (Ontario) to determine if it is in the public interest to:
(1) cease trade the Magna Transactions; and
(2) consider bringing an oppression action under section 248 of the Business Corporations Act (Ontario).
"The OSC decision in the Canadian Tire case provides a clear precedent for the OSC to convene a hearing to consider the Magna Transactions and to issue a cease trade order to prevent the consummation of a transaction that is contrary to the public interest," said Ermanno Pascutto,
Executive Director of FAIR Canada.
In its June 15, 2010 press release, FAIR Canada also called on institutional investors to publicly oppose the transaction and to call on regulators to intervene.
Click here for the June 15, 2010 FAIR Canada press release and other relevant media coverage about the proposed Magna transaction. |