Northwest & Ethical Investments L.P. is publicly stating its intention to vote against the proposed share structure meant to replace Magna’s current dual class shares.

The fund management firm is concerned about the high price tag shareholders are expected to pay as well as the lack of guidance provided by the special committee of the board that has examined this proposed transaction in detail.

“As much as we dislike dual class shares,” says Bob Walker, vice president of sustainability, “the price being asked for is too high and not justified from our perspective. We simply don’t believe that the proposed transaction is in the best interests of shareholders.”

Perhaps, the most troubling aspect of this situation is the
Northwest & Ethical says is troubled by the “questionable” role of the special committee established to consider and review the proposal.

“After 11 meetings over the course of one month, this special committee was unable to provide a recommendation to shareholders. Yet, shareholders are expected to make a determination for themselves without the detailed analysis from experts that this committee had at its disposal,” Northwest & Ethical says.

Northwest & Ethical is joining other institutional investors that have already publicly stated their intention to not support the proposed transaction. At Magna’s special meeting on June 28, Northwest & Ethical will signal its displeasure over this proposal and urges Magna to develop a more equitable proposal to eliminate dual class shares.

IE