0001164833-08-000113.txt : 20080516
<SEC-HEADER>0001164833-08-000113.hdr.sgml : 20080516
<ACCEPTANCE-DATETIME>20080516164811
ACCESSION NUMBER: 0001164833-08-000113
CONFORMED SUBMISSION TYPE: SC 13D/A
PUBLIC DOCUMENT COUNT: 2
FILED AS OF DATE: 20080516
DATE AS OF CHANGE: 20080516
SUBJECT COMPANY:
COMPANY DATA:
COMPANY CONFORMED NAME: MI DEVELOPMENTS INC
CENTRAL INDEX KEY: 0001252509
STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500]
IRS NUMBER: 000000000
STATE OF INCORPORATION: A6
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: SC 13D/A
SEC ACT: 1934 Act
SEC FILE NUMBER: 005-79210
FILM NUMBER: 08842950
BUSINESS ADDRESS:
STREET 1: 455 MAGNA DR
STREET 2: AURORA ONTARIO
CITY: CANADA
STATE: A6
ZIP: L4G7A9
BUSINESS PHONE: 9057136322
MAIL ADDRESS:
STREET 1: 455 MAGNA DR
STREET 2: AURORA ONTARIO
CITY: CANADA
STATE: A6
ZIP: L4G7A9
FILED BY:
COMPANY DATA:
COMPANY CONFORMED NAME: HOTCHKIS & WILEY CAPITAL MANAGEMENT LLC
CENTRAL INDEX KEY: 0001164833
IRS NUMBER: 954871957
FILING VALUES:
FORM TYPE: SC 13D/A
BUSINESS ADDRESS:
STREET 1: 725 SOUTH FIGUERORA ST 39TH FLOOR
CITY: LOS ANGELES
STATE: CA
ZIP: 90017
BUSINESS PHONE: 2134301000
MAIL ADDRESS:
STREET 1: 725 SOUTH FIGUEROA ST 39TH FLOOR
CITY: LOS ANGELES
STATE: CA
ZIP: 90017
</SEC-HEADER>
<DOCUMENT>
<TYPE>SC 13D/A
<SEQUENCE>1
<FILENAME>mim13d01.txt
<TEXT>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
MI Developments Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Class A Subordinate Voting Shares
- --------------------------------------------------------------------------------
(Title of Class of Securities)
55304X104
- --------------------------------------------------------------------------------
(CUSIP Number)
Anna Marie Lopez
Hotchkis and Wiley Capital Management, LLC
725 South Figueroa Street, 39th floor
Los Angeles, California 90017-5439
(213) 430-1896
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 16, 2008
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 13d-1(f) or 240.13d-1(g), check the
following box [ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7 for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following pages)
<PAGE>
13D
===================
CUSIP No. 55304X104
===================
- ------------====================================================================
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Hotchkis and Wiley Capital Management, LLC 95-4871957
- ------------====================================================================
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ ]
2
- ------------====================================================================
3 SEC USE ONLY
- ------------====================================================================
SOURCE OF FUNDS (See Instructions)
4
OO
- ------------====================================================================
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) OR 2(e)
[ ]
- ------------====================================================================
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------====================================================================
SOLE VOTING POWER
7
NUMBER OF 4,319,900
------------===========================================
SHARES SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY -0-
------------===========================================
EACH SOLE DISPOSITIVE POWER
9
REPORTING 5,379,100
PERSON WITH ------------===========================================
SHARED DISPOSITIVE POWER
10
-0-
- ------------====================================================================
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
5,379,100 shares (Ownership disclaimed pursuant to Section 13d-4
of the 1934 Act)
- ------------====================================================================
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
12 CERTAIN SHARES (See Instructions) [ ]
- ------------====================================================================
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
11.7%
- ------------====================================================================
TYPE OF REPORTING PERSON (See Instructions)
14
IA
- ------------====================================================================
<PAGE>
13D
===================
CUSIP No. 55304X104
===================
- ------------====================================================================
NAMES OF REPORTING PERSONS
1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Hotchkis and Wiley Mid-Cap Value Fund 95-4607961
- ------------====================================================================
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [ ]
(b) [ ]
2
- ------------====================================================================
3 SEC USE ONLY
- ------------====================================================================
SOURCE OF FUNDS (See Instructions)
4
OO
- ------------====================================================================
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) OR 2(e)
[ ]
- ------------====================================================================
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------====================================================================
SOLE VOTING POWER
7
NUMBER OF 2,533,400
------------===========================================
SHARES SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY -0-
------------===========================================
EACH SOLE DISPOSITIVE POWER
9
REPORTING 2,533,400
PERSON WITH ------------===========================================
SHARED DISPOSITIVE POWER
10
-0-
- ------------====================================================================
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
2,533,400 shares
- ------------====================================================================
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
12 CERTAIN SHARES (See Instructions) [ ]
- ------------====================================================================
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
5.5%
- ------------====================================================================
TYPE OF REPORTING PERSON (See Instructions)
14
IV
- ------------====================================================================
<PAGE>
Item 1. Security And Issuer
- ------ -------------------
This statement on Schedule 13D relates to Class A Subordinate Voting
Shares (the "Class A Shares") of MI Developments Inc. (the "Company"). The
Company's principal offices are located at 455 Magna Drive, Aurora, Ontario,
Canada L4G 7A9.
Item 2. Identity And Background
- ------ -----------------------
Preliminary Note: This statement is filed on behalf of Hotchkis and Wiley
Capital Management, LLC ("HWCM") and Hotchkis and Wiley Mid-Cap Value Fund ("HW
Fund"). HWCM and HW Fund are collectively referred to as "Reporting Persons".
(a) HWCM
(i) State or other place of its organization: Delaware
(ii) Principal business: registered investment advisor
(iii) Address of its principal office:
725 South Figueroa Street, 39th Floor
Los Angeles, CA 90017-5439
(iv) Criminal Conviction: HWCM has not been convicted in a criminal
proceeding during the last five years.
(v) Court or Administrative Proceedings: HWCM has not been a party to
a civil proceeding or judicial body, or subject to a judgment or
a decree enjoining future violations.
(b) HW Fund
(i) State or other place of its organization: Delaware
(ii) Principal business: investment company
(iii) Address of its principal office:
725 South Figueroa Street, 39th Floor
Los Angeles, CA 90017-5439
(iv) Criminal Conviction: The Fund has not been convicted in a
criminal proceeding during the last five years.
(v) Court or Administrative Proceedings: The Fund has not been a
party to a civil proceeding or judicial body, or subject to a
judgment or a decree enjoining future violations.
Item 3. Source And Amount Of Funds And Other Consideration
- ------- --------------------------------------------------
(a) HWCM*
HWCM purchased the Class A Shares on behalf of its clients in the ordinary
course of business, using the investment capital of its clients. The Class A
Shares were acquired at an average price of approximately $26.34 per share
(including commissions). The amount of investment capital used to purchase
the Class A Shares was approximately $140,018,376 (including commissions).
*Note that the average share price and amount of investment capital used to
purchase the Class A Shares includes those Class A Shares reported below by
HW Fund.
(b) HW Fund
HW Fund purchased the Class A Shares in the ordinary course of business, using
its investment capital. The Class A Shares were acquired at an average price of
approximately $27.82 per share (including commissions). The amount of
investment capital used to purchase the Class A Shares was approximately
$70,466,823 (including commissions).
Item 4. Purpose Of The Transaction
- ------ --------------------------
The purpose of the acquisition of the Class A Shares was and is for investment,
and the acquisitions of the Class A Shares by each of the clients of HWCM were
made in the ordinary course of business and were not made for the purpose of
acquiring control of the Company. As stated below in paragraph 3 of this
Item 4, HWCM may now be deemed to be seeking to influence the Company's policies
Although no Reporting Person has any specific plan or proposal to acquire or
dispose of Class A Shares, consistent with its investment purpose, each
Reporting Person may, at any time acquire additional Class A Shares or dispose
of any or all of its Class A Shares depending upon an ongoing evaluation of the
investment in the Class A Shares, prevailing market conditions, other investment
opportunities, liquidity requirements of the Reporting Person and/or other
investment considerations. No Reporting Person has made a determination
regarding a maximum or minimum number of Class A Shares which it may hold at any
point in time.
Also, consistent with their investment intent, the Reporting Persons have
communicated and intend as appropriate in the future to communicate their
opinion and make recommendations to the Special Committee of independent
directors of MI Developments (NYSE: MIM) (referred to as "MID")
regarding the proposed deal ("Deal") between MID and Mr. Frank Stronach. The
communications may include discussions on a specific course of actions for the
Special Committee to consider related to the Deal, and may also include
discussion on Company's policies, including but not limited to its operations,
structure and potential strategies to maximize shareholder value. The
Reporting Persons have, as noted, made certain recommendations to the Special
Committee of Independent Board Members. A copy of additional correspondence
since its initial letter to the Special Committee dated April 14, 2008 is
attached as an exhibit hereto. During the course of such communications, the
Reporting Persons' advocacy of one or more courses of action may be deemed an
attempt to influence control over the Company's policies.
Except to the extent the foregoing may be deemed a plan or proposal, none of the
Reporting Persons has any plans or proposals which relate to, or could result
in, any of the matters referred to in paragraphs (a) through (j),inclusive, of
the instructions to Item 4 of Schedule 13D. The Reporting Persons may, at any
time and from time to time, review or reconsider their position and/or change
their purpose and/or formulate plans or proposals with respect thereto.
Item 5. Interest In Securities Of The Issuer
- ------- ------------------------------------
(a) The percentage amount set forth in Row 13 for all cover pages
filed herewith is calculated based upon the 46,160,564 Class A Shares
outstanding as of March 31, 2008 as reported by the Company in its Report of
Foreign Private Issuer on Form 6-K for the month of May, 2008 filed with the
Securities and Exchange Commission on May 7, 2008.
(b) Number of shares as to which the person has:
(i) Sole power to vote or to direct the vote:
(a) HWCM - 4,319,900 (includes ownership reported by HW Fund
below)
(b) HW Fund - 2,533,400
(ii) Shared power to vote or to direct the vote:
(a) HWCM - 0
(b) HW Fund - 0
(iii) Sole power to dispose or to direct the disposition of:
(a) HWCM - 5,379,100 (includes ownership reported by HW Fund
below)
(b) HW Fund - 2,533,400
(iii) Shared power to dispose or to direct the disposition of:
(a) 0
(b) 0
Note that certain of HWCM's clients have retained voting power over the
Class A Shares that they beneficially own. Accordingly, HWCM has the
power to dispose of more Class A Shares than it can vote.
(c) Information concerning transactions relating to the shares
offered through open market transactions by the reporting persons during the
past sixty days are listed below.
NONE
(d) The securities as to which this Schedule is filed by HWCM, in
its capacity as investment adviser, are held in HWCM clients' custodial
accounts for the benefit of its clients. These clients have the right to
receive, or the power to direct the receipt of, dividends from, or the
proceeds from the sale of, such securities. No such client is known to have
such right or power with respect to more than five percent of this class
of securities, except as follows:
HW Fund: The Board of Trustees of the HW Fund can direct the disposition of
dividends received by such fund and can dispose of such securities.
HWCM disclaims beneficial ownership of all securities owned for the benefit
of its clients.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings Or
- ------ -------------------------------------------
Relationships With Respect To Securities Of The Issuer
------------------------------------------------------
Except as described above, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) among the Reporting Persons
or between such persons and any other person with respect to any securities of
the Company, including but not limited to the transfer or voting of any
securities of the Company, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, divisions of profits or
loss, or the giving or withholding of proxies.
Item 7. Materials To Be Filed As Exhibits
---------------------------------
Letter to the Special Committee of the Independent Board Members of
the Company.
<PAGE>
SIGNATURES
----------
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
Date: May 16, 2008
Hotchkis and Wiley Capital Management, LLC
By: /s/ Anna Marie Lopez
Name: Anna Marie Lopez
Title: Chief Operating Officer
Hotchkis and Wiley Mid-Cap Value Fund
By: /s/ Anna Marie Lopez
Name: Anna Marie Lopez
Title: President
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1
<SEQUENCE>2
<FILENAME>mimltr2.txt
<TEXT>
HOTCHKIS AND WILEY CAPITAL MANAGEMENT
725 South Figueroa Street, 39th Floor - Los Angeles, California 90017-5439 -
Tel 213.430.1000 - Fax 213.430.1001 - www.hwcm.com
May 14, 2008
To the Special Committee of Independent Board Members:
John Barnett, Director
Neil G. Davis, Director
Philip K. Fricke, Director
Manfred Jakszus, Director
c/o MI Developments, Inc.
455 Magna Drive
Aurora, Ontario
Canada
L4G 7K1
Dear Special Committee of Independent Board Members:
As long term, patient shareholders, we would like to share with you our
analysis of the value of MI Developments (MID). We believe that if MID were
run optimally, the company would be worth $50.81 per share. (See the attached
exhibit) Again, we reiterate our desire that you recommend against the
proposed reorganization based on the egregious and unnecessary value transfer
from existing shareholders to Mr. Stronach.
Sincerely,
/s/ David Green
David Green
Principal and Portfolio Manager
Disclosure Statement
This letter does not constitute an offer to sell or the solicitation of an
offer to buy any securities. Investment analyses are proprietary and
confidential and generally based on publicly available information (including
information obtained from company management). Certain information may have
been obtained from proprietary broker-dealer and/or independent third-party
research. Information obtained from these sources is considered reliable, but
its accuracy or completeness cannot be guaranteed. The research herein is not
intended to be, and should not be, relied on for investment advice. Any
forecasts and estimates made cannot be guaranteed. The opinions expressed
are as of May 14, 2008, and are subject to change and may not be accurate
reflections after that date.
Exhibit to Letter
VALUE OF REAL ESTATE:
Real Estate Revenues $186mm
G&A $20mm
D&A $44mm
Interest Expense $70.5mm ($1 billion of debt at LIBOR + 450bps)
-------
Pre-Tax Income $51.5 mm
Taxes $10.3mm (20% tax rate)
-------
Net Income $41.2mm
=======
CAPEX $0.5mm
AFFO $84.7mm (Net Income + D&A-CAPEX)
AFFO MULTIPLE 12.5x
REAL ESTATE VALUE $2.059 billion = $1.059b ($84.7mm x 12.5) + $1b
(new debt)
OTHER VALUES:
Aurora Land $55mm
Other Lands $104mm ($130mm discounted 20%)
Note due from MEC $255mm
MEC shares $25mm
Less Existing Debt ($264mm)
Plus Current Cash $139mm
------
TOTAL VALUE: $2.373 billion
==============
Shares Outstanding: 46.7mm
Value per share: $50.81
</TEXT>
</DOCUMENT>
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