Shareholders at Magna International, the family-controlled auto parts maker, approved a deal on Friday that sees the founding Stronach family give up its voting control at the company in exchange for a big payout.
The plan sees the abolition of the duel share structure through which the family controlled the voting rights of the business, despite owning less than 1% of the company. In return, founder Frank Stronach (pictured) will receive $300 million in cash, nine million new class A (single-vote) shares and control over a new joint venture between the family and Magna.
The family will retain a minority 7.4% in the company through the Stronach Trust.
That said, the deal does not sit well with all shareholders. (Continue reading here) In the statement announcing the plan on Friday, the company said certain shareholders have already said they "intend to present evidence and make arguments against the proposed transaction at the fairness hearing."
The deal requires approval from the Ontario Superior Court, which has hearings set for 12-13 August. If passed, which insiders expect it to be, the plan will end the family's 40 years of control over the business.
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