Tim Rice, managing partner at Louisiana investment firm Rice Voelker LLC, speculated that potential buyers are trying to low-ball Stronach because Magna is so strapped for cash.
"Every potential buyer knows that they're dealing with a seller with his back against the wall," Rice said yesterday. "You're not going to put the same kind of value on something as you might in a more solidified state of the seller."
Even under such dire financial troubles, Stronach remains steadfast that he will turn Magna around. He noted the turnaround of Magna International 18 years ago as the global auto-parts company came to the brink of bankruptcy.
"I believe the primary reason MEC's stock price is so low is that some financial institutions believe MEC won't make it, but let me tell you, I was there with Magna International," Stronach told shareholders at Magna Entertainment's annual meeting Tuesday in Toronto.
"Today, Magna is one of the premiere companies in the global automotive industry with $2 billion in cash and no debt," Stronach said.
He said that Magna should start showing positive results in two years. Magna had set an end-of-the-year deadline to eliminate more than $450 million in long-term debt.
"I'm committed to MEC and I want to show you shareholders that I will do everything I can to make MEC a viable company," Stronach said.
hanah.cho@baltsun.com
