Guardian Life agrees to vote its shares in favor of MI Developments' reorganization

By Lisa Kerner

Charlotte, N.C., April 10 - The Guardian Life Insurance Co. of America and its affiliates entered into a support agreement with 2167951 Ontario Inc., a new Ontario corporation controlled indirectly by Stronach Trust and formed for the purpose of participating in MI Developments Inc.'s proposed reorganization.

Under the agreement, certain of the investors agreed to vote, or cause to be voted, all class A shares of the company they own or control in favor of the transaction, according to a schedule 13D filing with the Securities and Exchange Commission.

Guardian Life has a 9% stake in MI Developments, the filing said.

On March 31, MI Developments said it received a reorganization proposal from various shareholders including its controlling shareholder, Frank Stronach of the Stronach Group. The goal of the reorganization is to return cash to shareholders.

Under the plan, holders of MI Developments' class A subordinate voting shares and class B shares would exchange their existing shares for $15.50 in cash and shares of a new public company, a prior MI Developments news release said.

MI Developments would sell its controlling equity investment in Magna Entertainment Corp. to an entity to be identified by the Stronach Group for $25 million in cash, the release said.

The new MI Developments would be owned 80% by the former public shareholders, 10% by an entity affiliated with Stronach and 10% by Magna International Inc. Its board of directors would consist of nine members: five nominated by the Stronach Group and Magna International and four nominated by the public shareholders.

MI Developments reported that the proposed reorganization would be carried out by way of a court-approved plan of arrangement under Ontario law and would be subject to applicable shareholder and regulatory approvals.

A special meeting of shareholders to consider the proposal will be called by May 30, and MI Developments expects the transaction to close by July 30.

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