MI Developments Inc. (MIM)
, "which rents office and factory properties, said Tuesday it plans to convert itself into a real estate investment trust and quintuple its dividend," according to TheGlobeAndMail
Activist Shareholders Pushed for REIT Structure
“This announcement represents a victory and vindication for all of the activist shareholders that have worked towards this over the last seven years,” said Alex Avery, CIBC World Markets analyst. TheGlobeAndMail reports that "Minority investors had been pushing for the REIT structure since 2004 as a way to extract bigger rewards from MI Developments. Prominent among the activists was Greenlight Capital LLC
, the hedge fund controlled by U.S. investor David Einhorn
, which sold its stake this year."
David Einhorn Advocated For REIT and Against MIM Management
David Einhorn was one of the biggest advocates for MIM to convert to a REIT. He was also highly critical of the firm's management, primarily denouncing, MIM chairman Frank Stronach for using MI’s cash to give loans and enter into transactions with other companies he controls, including Magna Entertainment
which manages horse racing tracks and casinos mainly in North America," reports GuruFocus
. Einhorn, who once owned as much as 11% of the company divested his position. Shortly thereafter, Stronach "recently left the company and they converted it to a REIT." According to GuruFocus, "Many investors expect MI to rise as it now sports a $2 dividend. The stock now trades at $32 meaning that Einhorn left a lot of money on the table."