Detroit – When shareholders of Magna International Inc. gather today for the auto-parts supplier’s annual meeting, questions are likely to come up about chairman Frank Stronach’s pursuit of a stake in the Chrysler Group, according to some analysts who follow the company.
But if Stronach decides to buy into the struggling automaker, no shareholder will be able to stop him. Stronach controls a vast majority of the company’s Class B shares that come with 500 votes each.
“He runs the show,” said Rich Morrow, an analyst with Jennings Capital Inc. in Toronto who follows Magna. “By owning the majority of this class, he has control of the company. That allows him to in effect, put forward his slate of directors who in turn would be responsible for governance.”
Magna has confirmed its interest in buying struggling Chrysler from DaimlerChrysler AG, and many U.S. analysts have named the Canadian company as the front-runner in the bidding, along with partner Onex Corp., a Canadian investment conglomerate.
Stronach expects word in “a few more weeks” from DaimlerChrysler about his bid, he told reporters in Toronto on Wednesday after the annual meeting of horse-track operator Magna Entertainment Corp., which he also heads.
“As far as we know, we’re still part of the picture – we’re still a contender,” he said, adding that Magna and Onex “have a very viable concept. We have major banks which are lined up.”
Aurora, Ontario-based Magna also appears to be the favorite of Chrysler’s powerful unions.
