Stronach is ready to trim his ties to the Canadian mega-supplier - but at a steep price.

Magna International Inc. (TSX: MG.A, NYSE: MGA) today announced that it has filed with the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission a disclosure supplement  to Magna’s Management Information Circular/Proxy Statement that was previously mailed to shareholders.

The Circular details the proposed elimination of Magna’s dual-class share structure by which the founding family controls the company with little actual equity. The supplement contains all additional disclosures that Magna is required to make by an order issuedby the Ontario Securities Commission when shareholders objected to the new corporate structure.  (See OSC Orders Magna to Disclose More on Stock Deal)

The controversial deal would end founder Frank Stronach’s control of the company, but at a steep price to other shareholders of the common stock Stronach would also get control of  Magna’s newly formed electric car components operation for very little money.

Stronach currently controls more than 54% of Magna shares while owning just 1% of its equity. The proposal would give him $300 million in cash, and nine million shares of what would then become watered common  stock.

OSC said back in June that the proxy “fails to provide sufficient information concerning the desirability or fairness of the Proposed Transaction and the board of directors of Magna has not made useful recommendations regarding the arrangement in the Circular.”

Critics contend that the proposed transactions are “abusive of shareholders and the capital markets” for a number of reasons, including the estimated 1,800% premium being paid by Magna for the Class B Shares relative to the market price of the Subordinate Voting Shares. One study shows that the usual premium in such a transaction is about 30%

The supplement is in the process of being mailed to Magna’s shareholders of record as at May 25, 2010, and is available on Magna’s website at www.magna.com; on the SEDAR website administered by the Canadian securities regulatory authorities at www.sedar.com; and on the EDGAR website administered by the U.S. Securities and Exchange Commission at www.sec.gov.

Magna’s Board has set a date of Friday, July 23, 2010 for the previously postponed special meeting of shareholders to consider and vote on the transaction. The proposal faces stiff opposition. Moreover, the Board still refuses to make a recommendation, claiming it is not able to determine whether the benefits of the proposal would outweigh the costs.