MI Developments receives reorganization proposal with support from majority of Class A and Class B shareholders

    AURORA, ON, March 31 /CNW/ - MI Developments Inc. (MID) (TSX: MIM.A,
MIM.B; NYSE:   MIM) today announced that its Board of Directors has received a
reorganization proposal on behalf of various shareholders of MID, including
entities affiliated with Frank Stronach (the Stronach Group), MID's
controlling shareholder. The proposal has received indications of support from
MID shareholders owning more than 50% of the outstanding Class A Subordinate
Voting Shares and approximately 95% of the outstanding Class B Shares.
    The stated objective of the reorganization is to (a) effect a substantial
cash distribution to MID shareholders and (b) create a focussed real estate
investment vehicle, which will distribute 80% of its available cash flow, in
which the interests of all shareholders will be fully aligned.
    The principal components of the reorganization proposal include:

    -  Holders of MID Class A Subordinate Voting Shares and MID Class B
       Shares would exchange their existing MID shares for US$15.50 in cash
       and shares of a new public company (New MID).

    -  New MID would be owned approximately 80% by the former public
       shareholders, 10% by the Stronach Group and 10% by Magna International

    -  MID's multiple voting share structure would be eliminated, with all of
       New MID's common shares carrying one vote per share and being equal in
       all respects except for Board nomination rights.

    -  The New MID Board of Directors would consist of nine members - five
       nominated by the Stronach Group and Magna International and four
       nominated by the public shareholders. Major decisions would
       require approval by more than two-thirds of the New MID Board.

    -  MID's controlling equity investment in Magna Entertainment Corp. (MEC)
       would be sold to an entity to be identified by the Stronach Group for
       US$25 million in cash.

    -  MID would transfer to a new limited partnership all of MID's loans to
       MEC and its subsidiaries (comprised of a bridge loan and two project
       financing facilities), US$150 million in cash (subject to adjustment
       if the amount of these loans is more or less than US$247 million) and
       all of MID's development lands in Aurora, Ontario. The Stronach Group
       would control the limited partnership through a 51% ownership interest
       and as general partner would have exclusive control and authority over
       all activities of the limited partnership. Unless consented to by
       more than two-thirds of the New MID Board, the limited partnership
       would be wound up after five years. New MID public shareholders
       would hold special shares that would provide them with a 49% interest
       in the limited partnership. The Stronach Group would invest an
       additional US$25 million as part of the proposed reorganization.

    -  New MID would be prohibited from entering into any future transactions
       with MEC or the limited partnership without the unanimous consent of
       New MID's Board of Directors.

    -  New MID would alter its capital structure by significantly increasing
       its credit facilities to US$1.1 billion. Magna International would be
       asked to guarantee a US$1 billion five-year term loan in exchange for
       a guarantee fee from New MID. Magna International would pay an amount
       equal to the guarantee fee for its 10% interest in New MID. UBS
       Securities LLC and Bank of Montreal have provided a highly confident
       letter concerning the term loan.

    -  New MID would distribute at least 80% of its available annual cash
       flow to its shareholders.

    -  New MID and Magna International would agree to negotiate a new leasing
       framework which is intended to be mutually beneficial without changing
       the current economics of MID's existing leases.

    For more details on the reorganization proposal, please consult the
proposal term sheet, which will be posted on MID's website at
    Institutional holders of MID Class A Subordinate Voting Shares holding an
aggregate of over 50% of the outstanding MID Class A Subordinate Voting Shares
have expressed support for the proposed reorganization. In addition, holders
of MID Class B Shares (including the Stronach Group) representing an aggregate
of approximately 95% of the class have agreed to support the implementation of
the proposal.
    John Simonetti, MID's Chief Executive Officer, stated, "Over the last
three years, disagreements with certain of MID's shareholders have impacted
our relationship with Magna International and, as a result, impaired our
ability to grow our core real estate business. While we have considered a
number of possible solutions, they were ultimately not pursued due primarily
to a lack of consensus among the various stakeholders. The reorganization
proposal, which has expressions of support from both the Stronach Group and a
majority of our public shareholders, appears to offer a new opportunity to
re-establish a strong working relationship with Magna International."
    The proposed reorganization would be carried out by way of a
court-approved plan of arrangement under Ontario law and would be subject to
applicable shareholder and regulatory approvals, including the requirements of
Multilateral Instrument 61-101. The proposal contemplates MID calling by May
30, 2008 a special meeting of shareholders to consider the proposal and
closing the transaction no later than July 30, 2008. In addition, the proposed
reorganization is conditional on, among other things, Magna International's
participation in the proposed transaction and the provision of the guarantee
of the New MID term loan by Magna International, the closing of the New MID
loan facilities, the finalization of definitive documentation and dissent
rights not being exercised by holders of more than 10% of the MID Class A
Subordinate Voting Shares.
    The Board of Directors of MID will review the reorganization proposal and
has established a Special Committee of independent directors of MID comprised
of Mr. Neil Davis, as Chairman, and Messrs. John Barnett, Phil Fricke and
Manfred Jakszus. The Special Committee will consider the reorganization
proposal and make recommendations to the MID Board.
    Magna International has not made any commitment to participate in the
reorganization proposal. MID has today advised Magna International of the
receipt of the proposal and has requested that the Magna International Board
of Directors review the proposal and advise MID following its review as to its
willingness to participate in the proposal. There can be no assurance that
Magna International will agree to participate in the transaction or the terms
on which it might agree to participate.
    MID cautions shareholders and others considering trading in securities of
MID that it has only recently received the reorganization proposal, and at
this time no decisions or recommendations with respect to the proposal have
been made by the MID Board. The proposal is subject to certain material
conditions, some of which are beyond MID's control, and there can be no
assurance that the transaction contemplated by the proposal, or any other
transaction, will be completed.

    About MID

    MID is a real estate operating company focusing primarily on the
ownership, leasing, management, acquisition and development of a predominantly
industrial rental portfolio for Magna and its subsidiaries in North America
and Europe. MID also acquires land that it intends to develop for mixed-use
and residential projects. MID holds a controlling interest in MEC, North
America's number one owner and operator of horse racetracks, based on revenue,
and one of the world's leading suppliers, via simulcasting, of live horse
racing content to the growing intertrack, off-track and account wagering

    Forward-Looking Statements

    This press release contains "forward-looking statements" within the
meaning of applicable securities legislation. Forward-looking statements may
include, among others, statements relating to the reorganization proposal and
the terms and conditions of such proposal. Words such as "may", "would",
"could", "will", "likely", "expect", "anticipate", "believe", "intend",
"plan", "forecast", "project", "estimate" and similar expressions are used to
identify forward-looking statements. Forward-looking statements should not be
read as guarantees of future events or results and will not necessarily be
accurate indications of whether or the times at or by which such future events
or results will be achieved. Undue reliance should not be placed on such
statements. Forward-looking statements are based on information available at
the time and/or management's good faith assumptions and analyses, and are
subject to known and unknown risks, uncertainties and other unpredictable
factors, many of which are beyond the Company's control, that could cause
actual events or results to differ materially from such forward-looking
statements. Important factors that could cause such differences include, but
are not limited to the risks that: the parties will not proceed with the
proposed reorganization; if the parties decide to proceed with a transaction,
the terms of such transaction may differ from those that are currently
contemplated by the proposed reorganization; if the parties decide to proceed
with a transaction, such transaction may not be successfully completed for any
reason (including the failure to obtain any required approvals); and are set
forth in the "Risk Factors" section in MID's Annual Information Form for 2007,
filed on SEDAR at www.sedar.com and attached as Exhibit 1 to MID's Annual
Report on Form 40-F for the year ended December 31, 2007, which investors are
strongly advised to review. The "Risk Factors" section also contains
information about the material factors or assumptions underlying such
forward-looking statements. Forward-looking statements speak only as of the
date the statements were made and unless otherwise required by applicable
securities laws, MID expressly disclaims any intention and undertakes no
obligation to update or revise any forward-looking statements contained in
this press release to reflect subsequent information, events or circumstances
or otherwise.
    This press release shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of the securities
in any jurisdiction in which such offer, solicitation or sale would be
unlawful. Securities of New MID have not been registered under the United
States Securities Act of 1933, as amended, and may not be offered or sold in
the United States absent registration or an applicable exemption from the
registration requirements.

For further information:

For further information: John Simonetti, MID's Chief Executive Officer,
at (905) 726-7619

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