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Stronach set to give up control of real estate firm

Quote:

Dec 21 (Reuters) - Canadian billionaire Frank Stronach is set to give up control of his real estate company, MI Developments (MIMa.TO) (MIM.N), in a new deal with shareholders, according to people familiar with the matter.

Stronach, who holds a controlling voting stake in the company, is prepared to exchange his control of the $800 million real estate development company for some of its horse racing track assets, these people said.

The deal which will swap his special voting shares in the company for the racing assets, is expected to obtain the support of some of the firm's big shareholders like hedge funds Farallon Capital and David Einhorn's Greenlight Capital. As a result of the deal, Stronach will no longer control the board, and a new board will be elected by the new shareholders, these people said.

A spokesperson for Farallon declined to comment, and Greenlight Capital declined to comment on the deal. A MI Developments official was not immediately available to comment. (Reporting by Emily Chasan, additional reporting by Alina Selyukh, John McCrank and Jennifer Ablan; Editing by Lisa Von Ahn)

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Trading halted on MI Developments stock
By Matt Hegarty

Trading of shares of MI Developments was halted on the Toronto Stock Exchange on Tuesday after reports of a potential deal that would allow the company’s chairman, Frank Stronach, to swap his controlling stake in the company for its racing assets. Toronto financial regulators ordered the halt at 12:48 p.m., approximately one hour after Reuters reported the possibility of the deal to swap Stronach’s special-voting shares for the assets. The report cited unidentified sources. The share price had risen 4.4 percent prior to the halt order, to $19.50.

If the deal reported by Reuters were approved by shareholders, Stronach would give up super-voting shares that allow him to hold approximately 60 percent of the voting rights while only holding less than 1 percent of the nominal value of the equity in the company. According to Reuters, the deal also would require the election of a new board at MI Developments.

MI Developments currently owns Santa Anita Park and Golden Gate Fields in California; Gulfstream Park and an adjacent casino in south Florida; and a 51 percent stake in Laurel Park and Pimlico Racecourse in Maryland (a deal to sell a 49 percent stake in the tracks to Penn National Gaming Inc. has closed but has not been approved by regulators). It also owns AmTote, a bet-processing company; the account-wagering platform XpressBet; and a half-interest in the television broadcasting company HorseRacingTV.