MI Developments announces it will not proceed with offer to take Magna Entertainment private
September 16 2004 - 3:41PM
PR Newswire (US)
MI Developments announces it will not proceed with offer to take
Magna Entertainment private AURORA, ON, Sept. 16
/PRNewswire-FirstCall/ -- MI Developments Inc. (TSX: MIM.A, MIM.B;
NYSE: MIM) ("MID") today announced it will not be proceeding with
its intention as previously stated in a press release issued on
July 13, 2004, to make an offer to acquire all of the outstanding
shares of Class A Subordinate Voting Stock of Magna Entertainment
Corp. (TSX: MEC.A; NASDAQ: MECA) ("MEC") not currently owned by
MID. The decision not to proceed with the intended offer was made
today by MID's Board of Directors, based upon a joint
recommendation from MID's Special Committee of Independent
Directors and MID's senior management team. This Special Committee
continues to review MID's relationship with MEC and may consider
other potential transactions with MEC which are in the best
interests of MID and all of its shareholders. John Simonetti, Chief
Executive Officer of MID stated: "We have heard the concerns of
certain of our shareholders about acquiring the rest of MEC. Also,
we recognize that certain MEC shareholders believed that the
intended offer price undervalued the potential growth opportunities
that exist for MEC. While MID has decided not to proceed with the
intended offer, we believe that the opportunities for growth within
MEC remain very significant. MEC comprises a significant portion of
MID's overall market capitalization. As holder of a 59% equity
interest in MEC, MID has a strong and vested interest in seeing
that MEC is successful in realizing these opportunities. We also
believe that MEC provides MID with potential opportunities to grow
and diversify our real estate portfolio. As such, MID is evaluating
participating in the development of MEC's underutilized lands and
certain of its racing assets and slot/video lottery terminal
opportunities directly through our real estate leasing and
development business. When this evaluation is completed, MID will
communicate additional information to its shareholders." MID also
announced that William Sutton has resigned from MID's Board of
Directors for personal and family reasons. In his place, Thomas
(Tom) Hodgson has been appointed today to the Board of Directors of
MID. Mr. Hodgson is currently President, Strategic Analysis
Corporation and prior to that has held senior positions with
Canadian financial institutions and U.K. companies since 1979. MID
further announced that Doug R. Tatters has been appointed today as
the Executive Vice-President and Chief Financial Officer of MID.
Mr. Tatters joined Magna International Inc. in February 1996 and
held a variety of positions, including Controller. Prior to today's
appointment, Mr. Tatters has been Vice-President and Controller of
MEC since March 2001. On July 12, 2004, MID purchased 3,682,515
shares of MEC Class A stock from Fair Enterprise Limited, a company
controlled by Frank Stronach (the Chairman of MID and MEC and a
controlling shareholder of MID) and by members of the Stronach
family, for US$0.89 and approximately 0.1922 of an MID Class A
Subordinate Voting Share per share of MEC Class A stock. The
purpose of the Fair Enterprise transaction was to ensure that Fair
Enterprise would not derive any benefit from the MEC going private
transaction. Given that the MEC going private transaction is not
proceeding, and as previously indicated by Fair Enterprise in a
letter delivered to the Ontario Securities Commission, Fair
Enterprise will be exercising its option to repurchase these
3,682,515 shares of MEC Class A stock from MID at the same price
paid by MID to Fair Enterprise. As a result, MID's ownership of MEC
will revert to its ownership position prior to the July 12, 2004
Fair Enterprise transaction. Following the repurchase by Fair
Enterprise, MID will own all of the MEC Class B stock and
approximately 9% of the outstanding MEC Class A stock, representing
in the aggregate, approximately 96% of the votes attached to MEC's
outstanding securities and an approximately 59% equity interest in
MEC. About MID MID is a real estate operating company engaged in
the ownership, development, management, leasing and acquisition of
industrial and commercial real estate properties located in North
America and Europe. Virtually all of its income-producing
properties are under lease to Magna International Inc. and its
subsidiaries. MID also holds a controlling investment in MEC, North
America's number one owner and operator of horse racetracks, based
on revenues, and one of the world's leading suppliers, via
simulcasting, of live 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 United States
Securities Act of 1933 and Section 21E of the United States
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 "may", "would", "could", "will", "likely, "believe",
"expect", "anticipate", "intend", "plan", "forecast", "project",
"estimate" 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. 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: about this press release,
please contact John Simonetti at (905) 726-7619.
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