08/24/2004 11:00PM

Magna presses stock case


Magna Developments, which owns majority interest in Magna Entertainment, the largest racetrack operator in North America, has petitioned federal regulators claiming that it does not need shareholder approval to purchase the outstanding stock of Magna Entertainment.

The opinion, filed with the Securities and Exchange Commission late Tuesday in response to a letter of objection from Greenlight Capital Inc., a minority shareholder in Magna Developments, said that while Magna "appreciates" Greenlight's position, the company will proceed with the plan based on advice from an independent committee and legal counsel.

In July, Magna Developments, which owns 62 percent of Magna Entertainment's stock, said it planned to buy the remaining publicly traded shares in Magna Entertainment. The $285 million deal also included the purchase of 3.7 million shares in Magna Entertainment owned by Frank Stronach, the chairman of Magna Developments, Magna Entertainment, and Magna International, the auto-parts company that is the former parent of the other Magna companies.

Greenlight objected to Magna Development's purchase of Stronach's stock, and said that the deal should be subject to minority shareholder approval.