TORONTO -- Magna International Inc. said today it will provide shareholders with more information on a plan to pay its founder nearly $900 million to give up his controlling shares, and will postpone a vote on the matter.
The shareholder vote had been scheduled for Monday, June 28. Magna said in a release that it would set a new date "in due course."
The decision came after the Ontario Securities Commission, Canada's main stock market regulator, said Magna must provide more information to shareholders about the proposed transaction with Frank Stronach.
A three-member panel of the OSC said the “circular does not provide sufficient disclosure to shareholders to permit them to make an informed decision,” according to a statement.
"We intend to work cooperatively with the OSC staff to address the commission's concerns and comply with the OSC's additional disclosure requirements," Vincent Galifi, chief financial officer of Magna, said in a statement.
The OSC sought approval from the panel led by James Turner for a cease-trade order on Magna's Class ‘B' shares or a ban on issuing new ‘A' shares to prevent the company from converting stock that gives Stronach control. The commission argued shareholders weren't given enough information to make an informed decision on the plan.
“We welcome a vote,” commission lawyer James Angus told the panel at a hearing in Toronto yesterday. “We want the voters to be properly informed.”
Under the plan approved by Magna's board, the Stronach Trust would receive $300 million in cash and 9 million Class A shares for the Class B stock that now gives the family about 66 percent of voting rights at the suburban Toronto company.
Magna ranks No. 5 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $17.37 billion in 2009.
Bloomberg and Reuters contributed to this report.