Shares in MI Developments, the company that took over the racing and gambling assets of bankrupt Magna Entertainment Corp. earlier this year, rose on Monday to $14.10 after the company’s chairman, Frank Stronach, offered to buy the shares for $13 apiece. The share price closed Friday at $10.67 and increased 32 percent on Monday, an indication that Stronach’s offer undervalued the company. MI Developments had a market capitalization of $664.2 million at Monday’s closing price and a balance sheet worth $2.04 billion. According to a statement issued by MI Developments on Monday morning, Stronach made the offer Friday night after the market closed through a company he controls, ST Acquisition Corp., with members of his family. The offer is the latest attempt by Stronach to exert more control over the racetrack and gambling properties, which include Santa Anita Park and Golden Gate Fields in California; Gulfstream Park and its attached casino in Florida; half-interests in Laurel Park and Pimlico Race Course in Maryland; and an account-wagering company, XpressBet. If Stronach’s offer were accepted – an unlikely prospect, unless he ups the price – he would buy all of the company’s 47 million shares, not including the 440,000 he already owns, and take the company private in a deal that would cost him at least $600 million. MI Developments took over the racing assets of Magna Entertainment Corp. in late April, a deal that wiped out $500 million in debt owed by Magna Entertainment to MI Developments. Magna Entertainment, which was a wholly owned subsidiary of MI Developments, was dissolved as a result. Stronach was the chairman of Magna Entertainment, and he remains the chairman of MI Developments. Because of a dual-stock structure, Stronach controls 60  percent of the shareholder voting rights at MI Developments even though he owns less than 1 percent of the nominal value of the company. MI Developments said in the statement that it would form a committee to evaluate the proposal. Officials for MI Developments did not return phone calls on Monday. Stronach is estimated to have a net worth of approximately $1.2 billion, according to Forbes. Earlier this year, he proposed that Magna International, an auto-parts company he controls, buy out his supervoting stake in that company, which has a similar dual-stock structure to MI Developments. Although some shareholders resisted the proposal, the offer was accepted after clearing a court challenge in late August. Stronach received a cash buyout of $300 million and a bloc of 9 million regular shares currently valued at $740  million, in exchange for giving up his voting control. In a statement, ST Acquisition Corp. said that the offer for MI Development’s stock would be financed through “a combination of cash on hand and third-party financing that is currently being arranged.” MI Developments was spun off from the auto-parts company in 2003 to create the lease-back structure for the auto-parts company’s properties and to hold the controlling stake in Magna Entertainment. MI Developments derived the majority of its revenues from those leases until taking over Magna Entertainment’s racing and gambling assets earlier this year. Some shareholders of the auto-parts company and MI Developments have criticized the companies’ involvement with racetracks, investments heavily supported by Stronach. By the time Magna Entertainment was dissolved this year, after a year in bankruptcy reorganization, the company had lost $500 million and could not pay off another $600  million in debt, the bulk of which was provided by MI Developments. For the second quarter of 2010, the latest for which financial documents are available, MI Developments had net income of $11.7 million, down from $31.3 million in the second quarter of 2009, when the racing assets were not directly on its books. According to the financial statements, the racing and gambling assets posted a net loss of $6.7 million in the quarter, and MI Developments noted that interest income was down by $11.7 million in the second quarter of 2010 compared with 2009. The interest income in the second quarter of 2009 was provided by Magna Entertainment as service on the loans MI Developments had provided until the bankruptcy deal wiped out the loans. Before Monday, MI Developments had traded as high as $14.57 in the past 52 weeks, but the share price had been steadily eroding since the company took over the racing and gambling assets as investors faced uncertainty over the performance of the racing operations.