Greenlight to Launch Proxy Fight to Unlock Value for MI Developments Shareholders
April 08 2005 - 2:08PM
PR Newswire (US)
Greenlight to Launch Proxy Fight to Unlock Value for MI
Developments Shareholders NEW YORK, April 8 /PRNewswire/ --
Greenlight Capital, Inc. today announced that it is preparing a
proxy circular to allow shareholders of MI Developments Inc. (TSX:
MIM.SV.A, MIM.MV.B; NYSE: MIM) to vote on its proposals to create
value for all shareholders. Greenlight is an investment management
firm with a focus on long-term value investing. Greenlight is the
second largest shareholder of MID, holding 9.9% of shares
outstanding, and has been a shareholder since the company's
spin-off in August 2003. Daniel Roitman, Chief Operating Officer of
Greenlight commented, "It is time for all shareholders of MID to
send a loud and clear message to the Board that shareholders want
MID to change its priorities and unlock value. We urge all
shareholders to review the Greenlight materials prior to voting,
and to return only the GREEN proxy form which will accompany those
materials." Greenlight issued the following statement explaining
its position: Greenlight Capital, Inc. continues to believe that MI
Developments Inc.'s (MID) adoption of Greenlight's proposals will
unlock substantial shareholder value currently suppressed by the
existing structure and business plan. Specifically, Greenlight
believes that MID shares could be worth in excess of $40 per share
if MID were to implement such proposals. Greenlight disagrees with
the MID Board of Directors' conclusion that the proposals to divest
its interest in Magna Entertainment Corp. (MEC) and convert to a
REIT are not in the interests of shareholders. In its lengthy
Management Information Circular, the Board has failed to make a
compelling case for its recommendation to vote against the
Greenlight proposals: * Despite engaging expert financial and legal
advisors and supposedly performing detailed analysis, the Board
failed to compare the potential value creation for MID shareholders
of implementing Greenlight's proposals versus MID's existing course
of action. * MID's Board appears more interested in "maximizing the
return on the Company's investment in MEC" than maximizing the
value of MID. The admission that MEC will need substantial
financing and that MID will likely need to provide such financing
at below-market rates is a reversal of last year's "policy" and
amounts to "throwing good money after bad." * The Board refers to
vague "ongoing limitations associated with a conversion of MID into
a REIT or similar structure" but fails to explain how MID
shareholders would be hurt by such limitations. Greenlight believes
that a structure that restrains MID from misusing capital to fund
MEC and that compels MID to pay sizable, regular dividends is in
the shareholders' best interests. * Greenlight believes Mr.
Stronach's opposition to these proposals and "reluctant" support
for even modest steps to enhance shareholder value reflects his
trivial economic stake in MID and true interest in pursuing his
private passion for horseracing at shareholder expense. MID's
Directors have consistently failed to recognize that they owe a
duty to all shareholders including the Class A shareholders who
have the majority economic stake in the company. Greenlight has no
choice but to continue its efforts to protect shareholder
interests, and plans to release its own proxy circular shortly.
DATASOURCE: Greenlight Capital, Inc. CONTACT: Media - Ed Rowley or
Kathleen Merrigan, both of The Abernathy MacGregor Group,
+1-212-371-5999, for Greenlight Capital, Inc.
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