MI Developments Issues Presentation of Analysis Underlying Board Recommendation to Vote Against Greenlight Capital Proposals
April 11 2005 - 11:08AM
PR Newswire (US)
MI Developments Issues Presentation of Analysis Underlying Board
Recommendation to Vote Against Greenlight Capital Proposals
Presentation Available On Company Website AURORA, ON, April 11
/PRNewswire-FirstCall/ -- MI Developments Inc. (TSX: MIM.SV.A,
MIM.MV.B; NYSE: MIM) announced today that it has posted on the
Company website an investor presentation relating to the two
resolutions proposed by hedge funds managed by Greenlight Capital,
Inc. and the MID Board of Directors' recommendation that
shareholders vote to reject those proposals. As previously
announced, the Board reached its conclusions after considering the
recommendations of a Special Committee of independent directors,
which retained independent legal and financial advisors. In
addition to the Special Committee recommendations, the Board
considered the advice of the Company's management and its financial
and legal advisors in recommending that shareholders vote against
the Greenlight resolutions. The investor presentation summarizes
the analysis that was performed by the advisors to the Special
Committee and management during their respective reviews of the
proposals. The investor presentation also highlights relevant
factors that Greenlight's proposals do not take into consideration.
The presentation is being used in a series of management meetings
with shareholders and is available to all investors at
http://www.midevelopments.com/ under the heading "Investor
Relations - Financial Reports & Filings - Other Reports". The
presentation will also be filed with the Ontario Securities
Commission and the United States Securities and Exchange
Commission. The presentation reflects the Board's conclusion that,
at this time, MID can best deliver enhanced long-term shareholder
value by retaining its current corporate form, maintaining its
strategic investment in Magna Entertainment Corp. (MEC), and
pursuing the Board's additional recommendations announced on April
4, 2005. "Both the Board and Greenlight agree on the potential
value of MID and the need to increase MID's return on equity in
order to enhance value for our shareholders. However, we have
different perspectives on the best way to achieve this," said John
Simonetti, Chief Executive Officer of MID. "Greenlight's financial
analysis suggests that the bulk of this value would be created by
MID taking on more than $500 million of debt to fund an immediate
stock buyback, and not necessarily by the conversion of MID to a
REIT or a spin-off of MEC. The Board's additional recommendations
are intended to achieve the same value-enhancing objectives through
a more disciplined approach to increasing return on equity over a
reasonable period of time that would allow MID to retain the
flexibility to continue to pursue its strategic plan and to grow
our core real estate business." On April 4, 2005, the Company
announced the unanimous recommendation of the Board, based on,
among other things, the Special Committee recommendations, that
shareholders vote against the two Greenlight resolutions at the
Company's Annual and Special Meeting on May 4, 2005. One resolution
proposes that MID sell to a third party or distribute to MID
shareholders its 59% equity (96% voting) interest in MEC. A second
resolution proposes that MID be converted into an income-oriented
investment vehicle such as a real estate investment trust (REIT).
The Special Committee and the Board determined that neither of
these actions is currently in the best interests of MID or its
shareholders. In commenting on the investor presentation and the
unfounded criticisms of the Board and Committee process made by
Greenlight in a statement on April 8, Douglas Young, MID's Lead
Director and Chairman of the Special Committee, stated: "The Board
remains committed to enhancing long-term shareholder value in a
disciplined and reasonable manner. Greenlight Capital is simply
wrong in its statements about the role of the Board of Directors.
Frank Stronach's interests, as portrayed by Greenlight or
otherwise, did not shape the recommendations of the Special
Committee of independent MID directors. The Board and the Committee
conducted a thorough, complete and independent review of the
Greenlight proposals." As well as Mr. Young, the Special Committee
consists of Philip Fricke and Manfred Jakszus, each of whom has
been determined by the MID Board of Directors to be independent of
MEC, MID's management and Mr. Stronach. The Special Committee
retained Goodmans LLP as its independent legal advisor and CIBC
World Markets Inc. as its independent financial advisor. Management
retained BMO Nesbitt Burns Inc. as its financial advisor. The
recommendations of the Board of Directors and its reasons are
described in the Management Information Circular that has been
mailed to MID shareholders in connection with the annual and
special meeting of shareholders to be held on May 4, 2005 at Le
Royal Meridien King Edward Hotel, 37 King Street East, Toronto,
Ontario, Canada, commencing at 10:00 a.m. (Toronto time).
Shareholders who are unable to attend the Meeting in person should
complete, date and sign the BLUE proxy that was enclosed with the
Management Information Circular and return it in accordance with
the instructions set out in the Management Information Circular. To
be effective, proxies must be received prior to 5:00 p.m. (Toronto
time) on May 2, 2005. Shareholders with questions about how to vote
their shares should contact our proxy solicitor as follows: MORROW
& CO., INC. Individuals Call Toll Free: 1-800-607-0088 Banks
and Brokers Call Toll Free: 1-800-654-2468 About MI Developments
Inc. MI Developments is a real estate operating company focusing
primarily on the ownership, leasing, management, acquisition and
development of a predominantly industrial rental portfolio for
Magna International Inc. and its subsidiaries in North America and
Europe. The Company also holds a controlling investment in Magna
Entertainment Corp., North America's number one owner and operator
of horse racetracks, based on revenue, and among the world's
leading suppliers, via simulcasting, of live horse racing content
to the growing inter-track, off-track and account wagering markets.
Forward-Looking Statements The contents of this press release may
contain "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements may include, among
others, statements regarding MID's future plans, costs, objectives
or economic performance, or the assumptions underlying any of the
foregoing. In this press release we use words such as "will",
"expect", "should" and similar words to identify forward-looking
statements. Forward- looking statements should not be read as
guarantees of future performance or results, and will not
necessarily be accurate indications of whether or the times at or
by which such future performance will be achieved. Forward-looking
statements are based on information available at the time and/or
management's good faith belief with respect to future events and
are subject to known and unknown risks, uncertainties and other
unpredictable factors, many of which are beyond MID's control, that
could cause actual results to differ materially from such
forward-looking statements. Such risks, uncertainties and other
factors are set forth under "Risk Factors" in MID's Annual
Information Form for 2004, attached as Exhibit 1 to MID's Annual
Report on Form 40-F for the year ended December 31, 2004. MID
expressly disclaims any intention and undertakes no obligation to
update or revise any forward-looking statements to reflect
subsequent information, events or circumstances or otherwise.
DATASOURCE: MI Developments Inc. CONTACT: Investors: Doug Tatters,
Executive Vice-President & Chief Financial Officer, MI
Developments Inc., (905) 726-7507; Media: John Lute, Lute &
Company, (416) 929-5883
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