-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A47Ow9zWzo6/zXo6GXyq/52LNfVNCcJ0yHV1+k/3i+OtMB+v+UeLdOoEEJAaeBul qzhYuURjhudeYzXo1lN6Ew== 0001047469-04-023189.txt : 20040713 0001047469-04-023189.hdr.sgml : 20040713 20040713163739 ACCESSION NUMBER: 0001047469-04-023189 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20040713 GROUP MEMBERS: 1346457 ONTARIO INC. GROUP MEMBERS: 445327 ONTARIO TRUST GROUP MEMBERS: BERGENIE ANSTALT GROUP MEMBERS: MI DEVELOPMENTS INC. GROUP MEMBERS: STRONACH TRUST SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MAGNA ENTERTAINMENT CORP CENTRAL INDEX KEY: 0001093273 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-RACING, INCLUDING TRACK OPERATION [7948] IRS NUMBER: 980208374 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-59157 FILM NUMBER: 04912367 BUSINESS ADDRESS: STREET 1: 337 MAGNA DRIVE STREET 2: AURORA CITY: ONTARIO CANADA STATE: A6 ZIP: L4G 7K1 BUSINESS PHONE: 9057262462 MAIL ADDRESS: STREET 1: 337 MAGNA DRIVE CITY: AURORA STATE: A6 ZIP: L4G 7K1 FORMER COMPANY: FORMER CONFORMED NAME: MI ENTERTAINMENT CORP DATE OF NAME CHANGE: 19991105 FORMER COMPANY: FORMER CONFORMED NAME: MI VENTURE INC DATE OF NAME CHANGE: 19990813 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: STRONACH FRANK CENTRAL INDEX KEY: 0000903977 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 337 MAGNA DRIVE CITY: AURORA ONTARIO CANADA STATE: A6 ZIP: L4G7K1 BUSINESS PHONE: 9057267002 MAIL ADDRESS: STREET 1: 337 MAGNA DRIVE CITY: AURORA ONTARIO CANADA STATE: A6 ZIP: L4G7K1 SC 13D/A 1 a2140103zsc13da.htm SCHEDULE 13D/A
QuickLinks -- Click here to rapidly navigate through this document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D/A

Under the Securities Exchange Act of 1934

(Amendment No. 2)

MAGNA ENTERTAINMENT CORP.

(Name of Issuer)

CLASS A SUBORDINATE VOTING STOCK

(Title of Class of Securities)

559211 10 7

(CUSIP Number)

Edward C. Hannah
MI Developments Inc.
337 Magna Drive
Aurora, Ontario L4G 7K1
(905) 713-6322

with copies to:

Kenneth G. Alberstadt
Law Office of Kenneth G. Alberstadt
111 Broadway, 18^th Floor
New York, New York 10006
(212) 404-7566

Scott M. Freeman
Sidley Austin Brown & Wood LLP
787 Seventh Avenue
New York, NY 10019
(212) 839-5300

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

July 12, 2004

(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 Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box o*

* Two of the filing persons, MI Developments Inc. and 1346457 Ontario Inc., have previously filed a statement on Schedule 13G pursuant to Rule 13d-1(d).


1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
FRANK STRONACH

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) o
(b) ý

3 SEC USE ONLY

4 SOURCE OF FUNDS
OO

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) o

6 CITIZENSHIP OR PLACE OF ORGANIZATION
Austria

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7 SOLE VOTING POWER 68,176,537 8 SHARED VOTING POWER 0 9 SOLE DISPOSITIVE POWER 68,176,537 10 SHARED DISPOSITIVE POWER 0

11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
68,176,537

12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
o

13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
62.9%

14 TYPE OF REPORTING PERSON
IN


1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
STRONACH TRUST

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) o
(b) o

3 SEC USE ONLY

4 SOURCE OF FUNDS
OO

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) o

6 CITIZENSHIP OR PLACE OF ORGANIZATION
Ontario, Canada

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7 SOLE VOTING POWER 66,529,247 8 SHARED VOTING POWER 0 9 SOLE DISPOSITIVE POWER 66,529,247 10 SHARED DISPOSITIVE POWER 0

11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
66,529,247

12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
o

13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
62.0%

14 TYPE OF REPORTING PERSON
OO


1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
445327 ONTARIO LIMITED

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) o
(b) o

3 SEC USE ONLY

4 SOURCE OF FUNDS
OO

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) o

6 CITIZENSHIP OR PLACE OF ORGANIZATION
Ontario, Canada

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7 SOLE VOTING POWER 66,529,247 8 SHARED VOTING POWER 0 9 SOLE DISPOSITIVE POWER 66,529,247 10 SHARED DISPOSITIVE POWER 0

11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
66,529,247

12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
o

13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
62.0%

14 TYPE OF REPORTING PERSON
CO


1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
BERGENIE ANSTALT

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) o
(b) ý

3 SEC USE ONLY

4 SOURCE OF FUNDS
OO

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) o

6 CITIZENSHIP OR PLACE OF ORGANIZATION
Liechtenstein

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7 SOLE VOTING POWER 0 8 SHARED VOTING POWER 0 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 0

11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0

12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
o

13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%

14 TYPE OF REPORTING PERSON
OO


1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
MI DEVELOPMENTS INC.

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) o
(b) o

3 SEC USE ONLY

4 SOURCE OF FUNDS
OO

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) o

6 CITIZENSHIP OR PLACE OF ORGANIZATION
Ontario, Canada

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7 SOLE VOTING POWER 66,510,899 8 SHARED VOTING POWER 0 9 SOLE DISPOSITIVE POWER 66,510,899 10 SHARED DISPOSITIVE POWER 0

11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
66,510,899

12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
o

13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
62.0%

14 TYPE OF REPORTING PERSON
CO


1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1346457 ONTARIO INC.

2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) o
(b) o

3 SEC USE ONLY

4 SOURCE OF FUNDS
OO

5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) o

6 CITIZENSHIP OR PLACE OF ORGANIZATION
Ontario, Canada

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7 SOLE VOTING POWER 5,212,911 8 SHARED VOTING POWER 0 9 SOLE DISPOSITIVE POWER 5,212,911 10 SHARED DISPOSITIVE POWER 0

11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,212,911

12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
o

13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.9%

14 TYPE OF REPORTING PERSON
CO

Introduction

This Amendment No. 2 (this "Amendment") amends and restates the Statement on Schedule 13D, as amended (the "Original 13D"), previously filed by Frank Stronach, the Stronach Trust, 445327 Ontario Limited ("445327") and Bergenie Anstalt ("Bergenie"), and the Statement on Schedule 13G, as amended (the "Schedule 13G"), previously filed by MI Developments Inc. ("MID") and 1346457 Ontario Inc. ("1346457"), in each case, with respect to shares of the Class A Subordinate Voting Stock, par value $0.01 per share (the "MECA Shares"), of Magna Entertainment Corp., a Delaware company (the "Company"). This Amendment No. 2 is being filed in order to (i) amend the Schedule 13G filing of MID and 1346457 to convert such filing into a Statement on Schedule 13D, (ii) disclose the purchase (the "MID Purchase") by MI Developments Inc. ("MID") of the MECA Shares held by Fair Enterprise Limited ("Fair Enterprise"), (iii) terminate reporting of beneficial ownership of MECA Shares by Bergenie as a result of the MID Purchase (iv) disclose the proposed acquisition by MID of MECA Shares pursuant to the proposed offer and merger described in Item 4 below, and (v) disclose certain intentions of Frank Stronach with respect to this proposed offer.

All information in this Amendment No. 2 relating to Frank Stronach, the Stronach Trust, 445327, Bergenie or Fair Enterprise has been furnished by these entities and MID and 1346457 disclaim any responsibility for the accuracy or completeness thereof.

Item 1. Security And Issuer

This statement relates to the MECA Shares. The principal executive offices of the Company are located at 337 Magna Drive, Aurora, Ontario, Canada, L4G 7K1.

Item 2. Identity And Background

(a): This Statement on Schedule 13D/A is being filed by each of the following persons:

and

(f)

(i) Frank Stronach, a citizen of Austria;

(ii): the Stronach Trust, a trust formed under the laws of Ontario, Canada;
(iii): 445327, an Ontario, Canada corporation;
(iv): Bergenie, a Liechtenstein anstalt;
(v): MID, an Ontario, Canada corporation; and
(vi): 1346457, an Ontario, Canada corporation.

(b)

The principal business address of Frank Stronach is Badener Strasse 12, Oberwaltersdorf, Austria 2522. The principal business address of each of the Stronach Trust and 445327 is 14875 Bayview Avenue, R.R.#2, Aurora, Ontario, Canada, L4G 3G8. The principal business address of Bergenie is Präsidial Anstalt, Postfach 583, Aeulestrasse 38, FL-9490 Vaduz, Liechtenstein. The principal business address of each of MID and 1346457 is 445 Magna Drive, Aurora, Ontario, Canada L4G 7A9.

(c)

Frank Stronach is a partner of Stronach & Co, an entity that provides consulting services to certain subsidiaries of Magna International Inc. ("Magna"). In addition, Mr. Stronach is the Chairman of the Board of the Company, the Chairman of the Board of MID and the Chairman of the Board of Directors of Magna. The Company is North America's number one owner and operator of horse racetracks, based on revenues, and one of the world's leading suppliers, via simulcasting, of live racing content to the growing inter-track, off-track and account wagering markets.

The Stronach Trust is a family trust that owns all the outstanding shares of 445327. 445327 is a corporation that holds controlling interests in MID and Magna.

Bergenie is an estate planning vehicle for the Stronach family. Bergenie owns all the outstanding shares of Fair Enterprise, which prior to the Fair Enterprise Sale acquired, held and voted securities of the Company.

MID is a real estate operating company engaged in the ownership, development, management, leasing, expansion and acquisition of income-producing industrial and commercial real estate properties. MID is the successor to Magna's real estate division and operated as an autonomous business unit within Magna prior to the reorganization of Magna described below. MID owns all the outstanding shares of 1346457, which is a holding company. Magna designs, develops and manufactures automotive systems, assemblies, modules and components and engineers and assembles complete vehicles.

Set forth on Schedule A to this statement is the name, business address, present principal occupation or employment, the principal business of any corporation or other organization in which such employment is conducted and the citizenship for each director and executive officer of 445327 pursuant to Item 2(a), (b) and (c) of Schedule 13D, which schedule is incorporated herein by reference.

Set forth on Schedule B to this statement is the name, business address, present principal occupation or employment, the principal business of any corporation or other organization in which such employment is conducted and the citizenship for each director and executive officer of Bergenie pursuant to Item 2(a), (b), (c) and (f), which schedule is incorporated herein by reference.

Set forth on Schedule C to this statement is the name, business address, present principal occupation or employment, the principal business of any corporation or other organization in which such employment is conducted and the citizenship for each director and executive officer of MID pursuant to Item 2(a), (b), (c) and (f) of Schedule 13D, which schedule is incorporated herein by reference.

Set forth on Schedule D to this statement is the name, business address, present principal occupation or employment, the principal business of any corporation or other organization in which such employment is conducted and the citizenship for each director and executive officer of 1346457 pursuant to Item 2(a), (b), (c) and (f) of Schedule 13D, which schedule is incorporated herein by reference.

(d): -(e) During the last five years, none of Frank Stronach, the Stronach Trust, 445327 (or, to 445327's knowledge, any person named on Schedule A), Bergenie (or, to Bergenie's knowledge, any person named on Schedule B), MID (or to MID's knowledge, any person named on Schedule C) or 1346457 (or to 1346457's knowledge, any person named on Schedule D) has been: (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors); or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which, he, she or it was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, Federal or State securities laws or finding any violation with respect to such laws.

Item 3. Source and Amount of Funds or Other Consideration

On March 10, 2000, Magna effected a distribution (the "MEC Distribution") of approximately 20% of the equity of the Company, in the form of (i) MECA Shares and (ii) shares of MEC Holdings (Canada) Inc., a Canadian subsidiary of the Company, exchangeable for MECA Shares (the "Exchangeco Shares"), to the holders of Class A Subordinate Voting Shares ("Magna Class A Shares") and Class B Shares ("Magna Class B Shares") of Magna. The MEC Distribution and the subsequent issuance of MECA Shares in exchange for all the Exchangeco Shares issued in the MEC Distribution (the "Share Exchanges") were made pursuant to an effective registration statement under the Securities Act of 1933, as amended (the "Securities Act"). Approximately 665,686 MECA Shares that are the subject of this statement were either held by the parties holding them prior to the MEC Distribution or acquired by such parties pursuant to the MEC Distribution and the Share Exchanges.

3,682,515 MECA Shares (the "Purchased Shares") were purchased in the open market during the period March 14, 2000 through March 27, 2003 by Fair Enterprise. The aggregate purchase price of $16,107,473 for the Purchased Shares was paid by Fair Enterprise with internally available funds.

1,000,000 MECA Shares (the "Option Shares") are subject to a currently outstanding and immediately exercisable option (the "Option") held by Frank Stronach that was issued to him by the Company in partial consideration for his services as Chairman. The Option was issued to Mr. Stronach on July 14, 2000.

On August 29, 2003, Magna effected a distribution (the "MID Distribution") to its shareholders of all the Class A Subordinate Voting Shares ("MID Class A Shares") and Class B Shares ("MID Class B Shares") of MID, without registration under the Securities Act, in a transaction meeting the requirements of Staff Legal Bulletin No. 4 of the Securities and Exchange Commission. The Magna shareholders did not provide any additional consideration for the MID Class A Shares and MID Class B Shares received by them in the MID Distribution. Also on August 29, 2003, and prior to the MID Distribution, MID was formed pursuant to an amalgamation, under the provisions of the Business Corporations Act (Ontario), of four direct and indirect wholly owned subsidiaries of Magna. As a consequence of the amalgamation, MID became the beneficial owner, directly and indirectly through a wholly owned subsidiary of MID, of all the MECA Shares and Class B Shares of the Company ("MECB Shares") previously held by direct and indirect wholly owned subsidiaries of Magna. As of August 29, 2003, MID beneficially owned 62,828,384 MECA Shares (including 58,466,056 MECA Shares issuable upon conversion of MECB Shares held by MID). All such shares had been either held by Magna and its affiliates prior to the MEC Distribution or acquired by Magna and its affiliates pursuant to the MEC Distribution and the Share Exchanges.

Pursuant to the Share Purchase Agreement dated as of July 12, 2004 (the "Purchase Agreement"), between MID and Fair Enterprise, on July 12, 2004, subject to the receipt of certain regulatory approvals described in the Purchase Agreement, Fair Enterprise sold the Purchased Shares to MID for 707,725 newly issued MID Class A Shares and U.S. $3,292,168.41 in cash, with the result that MID currently beneficially owns 66,510,899 MECA Shares (including 58,466,056 MECA Shares issuable upon conversion of MECB Shares held by MID).

Pursuant to the terms of the proposed offer described in Item 4 below, each MECA Share tendered into the offer will be exchanged for 0.2258 of a Class A Subordinate Voting Share of MID and U.S. $1.05 in cash. If MID owns, directly or indirectly, at least 90% of the outstanding MECA Shares following completion of the offer, in compliance with Delaware law, MID plans to effect a "short-form" merger of a newly formed, wholly owned subsidiary of MID with and into the Company.

Item 4. Purpose of Transaction.

Pursuant to the Purchase Agreement, on July 12, 2004, subject to the receipt of certain regulatory approvals described in the Purchase Agreement, Fair Enterprise sold the Purchased Shares to MID for 707,725 newly issued MID Class A Shares and U.S. $3,292,168.41 in cash, which consideration represents an amount equal to the number of Purchased Shares multiplied by the volume weighted average price of all trades of the MECA Shares on The Nasdaq National Market for the five trading days ending July 12, 2004. A copy of the Purchase Agreement is attached hereto as Exhibit B and is incorporated herein by reference. The description herein of the Purchase Agreement and the matters contemplated thereby is qualified in its entirety by reference to the aforementioned Purchase Agreement. As a result of the MID Purchase, Bergenie currently has no beneficial ownership of MECA Shares and is no longer a reporting person pursuant to Rule 13d-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

On July 13, 2004, MID issued a press release announcing its proposal (the "Proposal") to make an offer to acquire, through a newly formed, wholly owned subsidiary of MID, all the outstanding MECA Shares that it does not currently own, directly or indirectly, in exchange for 0.2258 of an MID Class A Subordinate Voting Share and U.S.$1.05 in cash (the "Offer"). In addition to customary conditions, including the receipt of regulatory approvals, the Offer will be conditioned upon the tender of (1) at least a majority of the MECA Shares not held by MID and related parties of MID and (2) such number of MECA Shares such that MID would hold at least 90% of the total number of then outstanding MECA Shares (after taking into account the MECA Shares currently held directly or indirectly by MID and the conversion of up to all the MECB Shares held directly or indirectly by MID into MECA Shares). Frank Stronach has announced his support of the Proposal and, subject to any fiduciary or other legal obligations, intends to use his best efforts to cause any entities over which he exercises control that hold MECA Shares to tender their shares into the Offer. A copy of the press release announcing the Proposal is attached hereto as Exhibit C and a copy of MID's letter to the Company's Board of Directors is attached hereto as Exhibit D, each of which is incorporated herein by reference. The description herein of the Proposal, the Offer and the matters contemplated thereby is qualified in its entirety by reference to the aforementioned press release and letter.

If MID owns, directly or indirectly, at least 90% of the outstanding MECA Shares following completion of the Offer, in compliance with Delaware law, MID plans to effect a "short-form" merger of a newly formed, wholly owned subsidiary of MID with and into the Company. If the proposed transactions are completed, the Company will become a wholly owned subsidiary of MID. Upon consummation of the proposed transaction, the MECA Shares will cease to be quoted on The Nasdaq National Market and the Toronto Stock Exchange and will become eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act.

Frank Stronach (in his capacity as Chairman of the Board of the Company or otherwise), the Stronach Trust, 445327, MID and/or 1346457 may, from time to time, communicate with the Company's management, directors, shareholders and other interested parties regarding matters of mutual interest, including strategies designed to increase the value of the MECA Shares. In the event that the Offer is not successful, the reporting persons may from time to time acquire or dispose of additional MECA Shares in the open market, in privately negotiated transactions or otherwise.

Except as indicated in this statement, the reporting persons currently have no plans or proposals that relate to or would result in any of the matters described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.

Item 5. Interest in Securities of the Issuer

(a): Frank Stronach is the beneficial owner of 1,000,000 MECA Shares constituting the Option Shares.

Frank Stronach acts as one of four trustees of the Stronach Trust. The remaining trustees of the Stronach Trust are members of Mr. Stronach's family. Mr. Stronach is entitled to appoint additional trustees and to remove trustees. Determinations by the Stronach Trust are made by a majority of the trustees, which majority must include Mr. Stronach.

The Stronach Trust owns all the outstanding shares of 445327, of which Mr. Stronach is the sole director. 445327 holds (i) 363,414 MID Class B Shares, such shares representing approximately 56.5% of the total votes carried by the MID Class A Shares and MID Class B Shares, and (ii) 726,829 Magna Class B Shares, such shares representing approximately 56.5% of the total votes carried by the Magna Class A Shares and Magna Class B Shares. MID beneficially owns 66,510,899 MECA Shares (including 58,466,056 MECA Shares issuable upon conversion of MECB Shares held by MID, 5,212,911 MECA Shares owned by 1346457 and 3,682,515 MECA Shares acquired in the MID Purchase), representing approximately 96.7% of the total votes carried by the MECA Shares and MECB Shares. 865714 Ontario Inc. ("865714") holds 18,348 MECA Shares acquired pursuant to the MEC Distribution and the Share Exchanges, with respect to which MECA Shares Magna exercises dispositive power pursuant to a unanimous shareholder agreement. The filing of this statement shall not be construed as an admission that Mr. Stronach beneficially owns any MECA Shares that are or may be deemed to be beneficially owned by the Stronach Trust, 445327, MID, 1346457, Magna or 865714. Without limitation of the foregoing, Mr. Stronach disclaims beneficial ownership of such MECA Shares for purposes other than U.S. securities law purposes.

Frank Stronach acts as one of the three trustees of the Employees Deferred Profit Sharing Plan (US) (the "US DPSP") of Magna, which holds 206,428 MECA Shares. The filing of this statement shall not be construed as an admission that Mr. Stronach beneficially owns any MECA Shares held by the US DPSP. Without limitation of the foregoing, Mr. Stronach disclaims beneficial ownership of such MECA Shares for purposes other than U.S. securities law purposes.

The Canada Trust Company is the trustee of the Magna Deferred Profit Sharing Plan (Canada) (the "Canadian DPSP"), which holds 440,862 MECA Shares. The Canada Trust Company has the power to vote the MECA Shares held by the Canadian DPSP. However, as Chairman of Magna, Mr. Stronach has the right to direct The Canada Trust Company with respect to the voting and disposition of the MECA Shares held by the Canadian DPSP. The filing of this statement shall not be construed as an admission that Mr. Stronach beneficially owns any MECA Shares held by the Canadian DPSP. Without limitation of the foregoing, Mr. Stronach disclaims beneficial ownership of such MECA Shares for purposes other than U.S. securities law purposes.

Assuming the beneficial ownership of all MECA Shares of which Mr. Stronach may be deemed to have beneficial ownership, (i) Frank Stronach is the beneficial owner of 68,176,537 MECA Shares (including the MECA Shares issuable upon conversion of the MECB Shares beneficially owned by MID and upon exercise of the Option and the MECA Shares acquired in the MID Purchase), representing 62.9% of the MECA Shares (determined in accordance with Rule 13d-3), (ii) each of the Stronach Trust and 445327 is the beneficial owner of 66,529,247 MECA Shares (including the MECA Shares issuable upon conversion of the MECB Shares beneficially owned by MID and the MECA Shares acquired in the MID Purchase), representing 62.0% of the MECA Shares (determined in accordance with Rule 13d-3), (iii) MID is the beneficial owner of 66,510,899 MECA Shares (including the MECA Shares issuable upon conversion of the MECB Shares beneficially owned by MID and the MECA Shares acquired in the MID Purchase), representing 62.0% of the MECA Shares (determined in accordance with Rule 13d-3) and (iv) 1346457 is the beneficial owner of 5,212,911 MECA Shares, representing 4.9%of the MECA Shares (determined in accordance with Rule 13d-3).

(b): Frank Stronach, the Stronach Trust, 445327, MID and 1346457 may be deemed to have sole voting and dispositive power with respect to all MECA Shares that are or may be deemed to be beneficially owned by such reporting persons.
(c): Except for the MID Purchase disclosed in Item 4 above, during the sixty days preceding the filing of this statement, none of the reporting persons acquired or disposed of any securities of the Company.
(d): Not applicable.
(e): On July 12, 2004, Bergenie ceased to be the beneficial owner of more than 5% of the MECA Shares.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

On July 12, 2004, pursuant to the Purchase Agreement, Fair Enterprise sold the Purchased Shares to MID for 707,725 newly issued MID Class A Shares and U.S. $3,292,168.41 in cash, which consideration represents an amount equal to the number of Purchased Shares multiplied by the volume weighted average price of all trades of the MECA Shares on The Nasdaq National Market for the five trading days ending July 12, 2004. The MID Purchase is subject to the receipt of certain regulatory approvals described in the Purchase Agreement. On the terms set forth in the Purchase Agreement, Fair Enterprise has the option to repurchase the MECA Shares purchased by MID in the MID Purchase if MID publicly announces that it is abandoning its proposed acquisition of all the issued and outstanding MECA Shares not currently owned by it or MID has not acquired all the issued and outstanding MECA Shares not currently owned by it by December 30, 2004. The description herein of the Purchase Agreement and the matters contemplated thereby is qualified in its entirety by reference to the aforementioned Purchase Agreement.

Item 7. Material to be Filed as Exhibits


Exhibit A		Copy of an agreement among the reporting persons to file this Statement on Schedule 13D/A on behalf of each of them.
Exhibit B		Share Purchase Agreement dated as of July 12, 2004 between Fair Enterprise Limited and MI Developments Inc.
Exhibit C		Press Release of MI Developments Inc. dated July 13, 2004.
Exhibit D		Letter from MI Developments Inc. to the Board of Directors of Magna Entertainment Corp. dated July 12, 2004

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.

Dated: July 13, 2004
		/s/ FRANK STRONACH Name: Frank Stronach
	STRONACH TRUST
	By:	/s/ FRANK STRONACH Name: Frank Stronach Title: Trustee
	445327 ONTARIO LIMITED
	By:	/s/ FRANK STRONACH Name: Frank Stronach Title: President
	BERGENIE ANSTALT
	By:	Prasidial Management Anstalt Director of Bergenie Anstalt
		/s/ DR. ALEXANDER LINS Name: Dr. Alexander Lins Title: Director of Prasidial Management Anstalt
		/s/ DR. CAROLYN INTERMANN Name: Dr. Carolyn Intermann Title: Director of Prasidial Management Anstalt
	MI DEVELOPMENTS INC.
	By:	/s/ EDWARD C. HANNAH Name: Edward C. Hannah Title: Executive Vice President, Corporate Development, Secretary and General Counsel
	1346457 ONTARIO INC.
	By:	/s/ EDWARD C. HANNAH Name: Edward C. Hannah Title: Executive Vice President and Secretary

Index To Exhibits

Exhibit		Description
A		Copy of an agreement among the reporting persons to file this Statement on Schedule 13D/A on behalf of each of them.
B		Share Purchase Agreement dated as of July 12, 2004 between MI Developments Inc. and Fair Enterprise Limited.
C		Press Release of MI Developments Inc. dated July 13, 2004.
D		Letter from MI Developments Inc. to the Board of Directors of Magna Entertainment Corp. dated July 12, 2004

Schedule A

445327 ONTARIO LIMITED

	Present Principal Occupation
Name and Business Address	(and Principal Business of Organization)	Citizenship
Frank Stronach Badener Strasse 12 Oberwaltersdorf, Austria 2522	Partner, Stronach & Co. (Consulting company)	Austria
Belinda Stronach 16715 Yonge Street, Unit #1 Newmarket, Ontario, Canada L3X 1X4	M.P. Aurora/Newmarket (Government)	Canada
Andrew Stronach 14875 Bayview Avenue RR#2 Aurora, Ontario, Canada L4G 3G8	President, The Alpen House Limited (Farming, horse breeding and racing company); Consultant to Magna International Inc. (Automotive systems manufacturer)	Canada
Elfriede Stronach 14875 Bayview Avenue RR#2 Aurora, Ontario, Canada L4G 3G8	Secretary and Treasurer, The Alpen House Limited (Farming, horse breeding and racing company)	Canada

Schedule B

BERGENIE ANSTALT

	Present Principal Occupation
Name and Business Address	(and Principal Business of Organization)	Citizenship
Präsidial Management Anstalt Postfach 583 Aeulestrasse 38 FL-9490 Vaduz Liechtenstein	Trust company	Liechtenstein
Dr. Christof Ebersberg Schlattstrasse 441 Ruggell Liechtenstein	Director, Präsidial Management Anstalt (Trust company)	Austria
Juerg Keller Alvierweg 19 9490 Vaduz Liechtenstein	Director, Präsidial Management Anstalt (Trust company)	Switzerland

Schedule C

MI DEVELOPMENTS INC.

	Present Principal Occupation
Name and Business Address	(and Principal Business of Organization)	Citizenship
Frank Stronach Badener Strasse 12 Oberwaltersdorf, Austria 2522	Partner, Stronach & Co. (Consulting company)	Austria
Barry B. Byrd 7108 Fairway Drive Suite 225 Palm Beach Gardens, FL 33418	Partner, Pineiro Wortman & Byrd, P.A. (Law firm)	United States
William G. Davis 79 Wellington Street West Suite 3000 Toronto, Ontario, Canada M5K 1N2	Counsel, Torys LLP (Law firm)	Canada
Philip K. Fricke 45 Hampshire Road Mahwah, NJ 07430	President, PFK Financial Consultants (Strategic and financial planning)	United States
Manfred Jakszus D'Orsaygasse 4/19 1090 Wien, Austria	Independent investor and real estate developer	Austria
Brian V. Tobin 337 Magna Drive, Aurora, Ontario, Canada L4G 7K1	Chief Executive Officer, MI Developments Inc. (Real estate operating company)	Canada
Andrew A.L. Blair 337 Magna Drive, Aurora, Ontario, Canada L4G 7K1	Executive Vice President and Chief Operating Officer of MI Developments Inc. (Real estate operating company)	Canada
Edward C. Hannah 337 Magna Drive, Aurora, Ontario, Canada L4G 7K1	Executive Vice President, Corporate Development, Secretary and General Counsel, MI Developments Inc. (Real estate operating company)	Canada
John D. Simonetti 455 Magna Drive, Aurora, Ontario, Canada L4G 7A9	Vice-President, Finance and Chief Financial Officer, MI Developments Inc. (Real estate operating company)	Canada

Schedule D

1346457 ONTARIO INC.

	Present Principal Occupation
Name and Business Address	(and Principal Business of Organization)	Citizenship
Brian V. Tobin 337 Magna Drive, Aurora, Ontario, Canada L4G 7K1	Chief Executive Officer, MI Developments Inc. (Real estate operating company)	Canada
Edward C. Hannah 337 Magna Drive, Aurora, Ontario, Canada L4G 7K1	Executive Vice President, Corporate Development, Secretary and General Counsel, MI Developments Inc. (Real estate operating company)	Canada
John D. Simonetti 455 Magna Drive, Aurora, Ontario, Canada L4G 7A9	Vice-President, Finance and Chief Financial Officer, MI Developments Inc. (Real estate operating company)	Canada

QuickLinks

SIGNATURES
Index To Exhibits
445327 ONTARIO LIMITED
BERGENIE ANSTALT
MI DEVELOPMENTS INC.
1346457 ONTARIO INC.
EX-1 2 a2140103zex-1.htm EXHIBIT 1
QuickLinks -- Click here to rapidly navigate through this document

Exhibit A

JOINT FILING AGREEMENT

The undersigned hereby agree jointly to prepare and file with regulatory authorities a Statement on Schedule 13D/A and any future amendments to the Original 13D (as defined therein) reporting each of the undersigned's ownership of shares of Magna Entertainment Corp.'s Class A Subordinate Voting Stock, par value $0.01 per share, and hereby affirm that such Statement on Schedule 13D/A is being filed on behalf of each of the undersigned in accordance with Rule 13d-1(k)(1) under the Securities Exchange Act of 1934. This agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

Dated: July 13, 2004
		/s/ FRANK STRONACH Frank Stronach
	STRONACH TRUST
	By:	/s/ FRANK STRONACH Name: Frank Stronach Title: Trustee
	445327 ONTARIO LIMITED
	By:	/s/ FRANK STRONACH Name: Frank Stronach Title: President
	BERGENIE ANSTALT
	By:	Prasidial Management Anstalt Director of Bergenie Anstalt
		/s/ DR. ALEXANDER LINS Name: Dr. Alexander Lins Title: Director of Prasidial Management Anstalt
		/s/ DR. CAROLYN INTERMANN Name: Dr. Carolyn Intermann Title: Director of Prasidial Management Anstalt
	MI DEVELOPMENTS INC.
	By:	/s/ EDWARD C. HANNAH Name: Edward C. Hannah Title: Executive Vice President, Corporate Development, Secretary and General Counsel
	1346457 ONTARIO INC ..
	By:	/s/ EDWARD C. HANNAH Name: Edward C. Hannah Title: Executive Vice President and Secretary

QuickLinks

JOINT FILING AGREEMENT
EX-2 3 a2140103zex-2.htm EXHIBIT 2
QuickLinks -- Click here to rapidly navigate through this document

Exhibit B

SHARE PURCHASE AGREEMENT

THIS AGREEMENT made the 12^th day of July, 2004.

B E T W E E N:

FAIR ENTERPRISE LIMITED,
a corporation existing under the laws of the Island of Jersey,

(hereinafter referred to as "Fair Enterprise"),

— and —

MI DEVELOPMENTS INC.,
a corporation existing under the laws of the Province of Ontario,

(hereinafter referred to as "MID").

WHEREAS Fair Enterprise is the owner of 3,682,515 MEC Class A Shares (as defined below) (the "Purchase Shares") in the capital of MEC (as defined below);

AND WHEREAS Fair Enterprise and MID propose that the Purchase Shares be transferred to MID in accordance with the terms and conditions of this Agreement;

AND WHEREAS Fair Enterprise wishes to have the option to repurchase the Purchase Shares from MID in the event that the Privatization Transaction (as defined below) has not been completed by December 30, 2004;

THIS AGREEMENT WITNESSES THAT in consideration of the respective covenants and agreements of the parties hereinafter contained and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged by each party), the parties hereby agree as follows:

ARTICLE 1
INTERPRETATION

1.1 Defined Terms.

For the purposes of this Agreement, unless the context otherwise requires, the following terms shall have the respective meanings set out below and grammatical variations of such terms shall have corresponding meanings:

"Cash Consideration" means cash in the amount of 15% of the Purchase Price;

"CRA" means the Canada Revenue Agency, or any successor thereof;

"Exchange Shares" means that number of MID Class A Shares to be issued to Fair Enterprise pursuant to section 2.2 hereof equal to 85% of the product of (i) the number of the Purchase Shares and (ii) the quotient obtained by dividing the volume weighted average price of all trades of the MEC Class A Shares on NASDAQ for the five trading days ending on the date hereof by the volume weighted average price of all trades of the MID Class A Shares on the NYSE for the five trading days ending on the date hereof, with such resulting number of Exchange Shares being rounded up to the nearest whole share;

"ITA" means the Income Tax Act (Canada), as amended from time to time;

"MEC" means Magna Entertainment Corp., a corporation existing under the laws of the state of Delaware;

"MEC Class A Shares" means the shares of Class A Subordinate Voting Stock in the capital of MEC;

"MID Class A Shares" means the Class A Subordinate Voting Shares in the capital of MID;

"NASDAQ" means The Nasdaq National Market;

"NYSE" means the New York Stock Exchange;

"Privatization Transaction" means the proposed acquisition by MID of all the issued and outstanding MEC Class A Shares not currently owned by MID pursuant to an exchange offer and/or merger;

"Purchase Price" has the meaning given to that term in section 2.1;

"Regulatory Approvals" means the acceptance by the TSX of a notice for filing in respect of the issuance by MID of the Exchange Shares and any other regulatory approval required in connection with such issuance; and

"TSX" means the Toronto Stock Exchange.

1.2 Currency.

Unless otherwise indicated, all dollar amounts referred to in this Agreement are expressed in the lawful currency of the United States of America.

1.3 Sections and Headings.

The division of this Agreement into Articles, sections and subsections and the insertion of headings are for reference purposes only and shall not affect the interpretation of this Agreement. Unless otherwise indicated, any reference herein to a particular Article, section or subsection refers to the specified Article, section or subsection of this Agreement. The words "hereby", "hereof" and similar terms refer to this Agreement and not to any particular Article, section, subsection or other portion of this Agreement.

1.4 Number, Gender and Persons.

In this Agreement, words importing the singular number shall include the plural and vice versa, words importing gender shall include all genders and words importing persons shall include individuals, corporations, partnerships, limited liability companies, associations, trusts, unincorporated organizations, governmental bodies and other legal or business entities.

1.5 Applicable Law.

This Agreement shall be construed, interpreted and enforced in accordance with, and the respective rights and obligations of the parties shall be governed by, the laws of the Province of Ontario and each party irrevocably and unconditionally submits to the non-exclusive jurisdiction of the courts of such jurisdiction and all courts competent to hear appeals therefrom.

1.6 Successors and Assigns.

This Agreement shall enure to the benefit of and shall be binding on and enforceable by the parties and their respective successors and permitted assigns, as applicable. Neither party may assign any of its rights or obligations hereunder without the prior written consent of the other party.

1.7 Execution in Counterparts.

This Agreement may be executed in counterparts, each of which shall constitute an original and both of which taken together shall constitute one and the same instrument.

ARTICLE 2
EXCHANGE OF PURCHASE SHARES

2.1 Transfer.

Subject to the provisions of this Agreement, Fair Enterprise hereby delivers and transfers to MID at the time and on the date that the purchase of the Purchase Shares is approved by the Board of Directors of MID (i) all the right, title and interest of Fair Enterprise in and to the Purchase Shares and (ii) one or more certificates representing the Purchase Shares, duly endorsed in blank or with customary stock powers executed and attached thereto (the "Purchase Share Certificates"), in consideration of the agreement of MID to issue the Exchange Shares and pay the Cash Consideration to Fair Enterprise upon receipt of all Regulatory Approvals. The purchase price (the "Purchase Price") for the Purchase Shares shall be an amount equal to the number of Purchase Shares multiplied by the volume weighted average price of all trades of the MEC Class A Shares on NASDAQ for the five trading days ending on the date hereof, being the fair market value thereof.

2.2 Issuance of Exchange Shares.

MID covenants with Fair Enterprise that it will apply to the TSX to obtain all Regulatory Approvals. Upon receipt of all Regulatory Approvals, MID shall pay the Cash Consideration to Fair Enterprise, shall issue to Fair Enterprise the Exchange Shares and shall deliver to Fair Enterprise a certificate representing the Exchange Shares registered in the name of Fair Enterprise. If Regulatory Approvals are not obtained by December 30, 2004, the Cash Consideration will not be paid and the Exchange Shares will not be issued and the Purchase Shares shall immediately on the next day by operation of this Agreement be transferred to Fair Enterprise, free and clear of all liens, charges and encumbrances, in each case, without any further action by the parties hereof and MID shall promptly thereafter deliver the Purchase Share Certificates to Fair Enterprise.

2.3 Privatization Transaction Not Completed.

(a) In the event that the Exchange Shares have been issued and the Cash Consideration paid pursuant to section 2.2, but either (i) the Privatization Transaction has not been completed by December 30, 2004, or (ii) prior to December 30, 2004, MID publicly announces that it is abandoning the Privatization Transaction, then Fair Enterprise shall, at its option by providing written notice thereof to MID (the "Repurchase Notice") within ten days thereafter, be entitled to repurchase the Purchase Shares from MID, free and clear of all liens, charges and encumbrances, in consideration for, at Fair Enterprise's option, either (i) the Exchange Shares, free and clear of all liens, charges and encumbrances, and the Cash Consideration, or (ii) the Cash Consideration and an amount in cash equal to the number of the Exchange Shares multiplied by the volume weighted average price of all trades of the MID Class A Shares on the NYSE for the five trading days ending on the date prior to the date of such repurchase.

(b) In the event that the Exchange Shares have not been issued and the Cash Consideration has not been paid pursuant to section 2.2 and MID publicly announces that it is abandoning the Privatization Transaction, then Fair Enterprise shall, at its option by providing a Repurchase Notice to MID within ten days thereafter, be entitled to repurchase the Purchase Shares from MID, free and clear of all liens, charges and encumbrances, in consideration for the termination of MID's obligation to issue the Exchange Shares and pay the Cash Consideration pursuant to section 2.1.

(c) The repurchase of the Purchase Shares by Fair Enterprise from MID as required by sections 2.3(a) and 2.3(b) shall occur within ten days of the Repurchase Notice by Fair Enterprise to MID, provided that notwithstanding the foregoing or section 2.3(a), no such repurchase shall occur after December 31, 2004.

(d) Fair Enterprise and MID intend that, to the extent consistent with applicable law, any repurchase by Fair Enterprise of the Purchase Shares from MID will be treated for United States federal income tax purposes as resulting in a rescission of Fair Enterprise's transfer of the Purchase Shares to MID.

2.4 Acknowledgement.

The parties acknowledge that beneficial ownership, control and direction over the Purchase Shares is hereby transferred from Fair Enterprise to MID at the time and on the date that the purchase of the Purchase Shares is approved by the Board of Directors of MID and Fair Enterprise acknowledges that MID shall be entitled to receive all dividends and exercise all voting and other rights attaching to the Purchase Shares from and after such time and date.

2.5 Adjustment.

(a) The parties agree that the Purchase Price for the Purchase Shares is intended to be the fair market value thereof and the consideration delivered in satisfaction of the Purchase Price is intended to have a fair market value equal to such Purchase Price. In the event that the CRA alleges that the Purchase Price is not equal to the fair market value of the Purchase Shares or that the consideration delivered in satisfaction of the Purchase Price does not have a fair market value equal to the Purchase Price, the parties agree to adjust the Purchase Price to an amount equal to the fair market value of the Purchase Shares and to adjust the consideration deliverable in satisfaction of the Purchase Price, as applicable, as is determined by the parties or by the CRA or a court of competent jurisdiction upon expiry of all rights of objection or appeal, and to adjust the consideration in the manner and to the extent required to give effect to any such Purchase Price adjustments.

(b) The purpose of the right to repurchase granted to Fair Enterprise in Section 2.3 is intended to permit Fair Enterprise to reacquire the Purchase Shares pursuant hereto in the event that the Privatization Transaction has not been completed by December 30, 2004. The parties agree that in the event the CRA alleges that the amount paid by Fair Enterprise on any exercise of that right is not equal to the fair market value of the Purchase Shares, such adjustments will be made as are necessary to ensure that the amount paid by Fair Enterprise is equal to the fair market value of such shares as is determined by the parties, by the CRA or by a court of competent jurisdiction upon the expiry of all rights of objection or appeal.

2.6 Withholding Taxes.

Fair Enterprise acknowledges that MID is entitled to withhold from consideration otherwise payable or property deliverable to Fair Enterprise pursuant to this Agreement, to the extent, if any, required by applicable tax law. Without derogation of MID's absolute right to withhold such amounts as are required by law, the parties agree to discuss the manner in which the withholding shall be satisfied.

2.7 Legend.

Every Purchase Share Certificate shall bear the following legend:

THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS HEREBY NOTIFIED THAT THE SELLER OF THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

THE HOLDER OF THIS CERTIFICATE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) THAT PRIOR TO SUCH TRANSFER, FURNISHES THE COMPANY WITH A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE (THE FORM OF WHICH CAN BE OBTAINED FROM THE COMPANY) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF SECURITIES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES 1 THROUGH 5 IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SHARES REPRESENTED BY THIS CERTIFICATE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE. IN ANY CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTIONS WITH REGARD TO THE SHARES REPRESENTED BY THIS CERTIFICATE EXCEPT AS PERMITTED UNDER THE SECURITIES ACT.

THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SHARES REPRESENTED BY THIS CERTIFICATE FROM IT OF THE FOREGOING RESALE RESTRICTIONS.

ARTICLE 3
REPRESENTATIONS, WARRANTIES
AND FURTHER COVENANTS

3.1 Representations and Warranties of Fair Enterprise.

Fair Enterprise hereby represents and warrants to MID as follows and acknowledges that MID is relying on such representations and warranties in connection with its acquisition of the Purchase Shares:

(a): Fair Enterprise is a corporation existing under the laws of the Island of Jersey and has the corporate power to enter into and perform its obligations under this Agreement;
(b): this Agreement is a legal, valid and binding obligation of Fair Enterprise, enforceable against Fair Enterprise by MID in accordance with its terms except as enforcement may be limited by bankruptcy, insolvency and other laws affecting the rights of creditors generally and except that equitable remedies may be granted only in the discretion of a court of competent jurisdiction;
(c): Fair Enterprise is the registered and beneficial owner of the Purchase Shares with a good and marketable title thereto, free of all liens, charges and encumbrances whatsoever; and
(d): no person, firm or corporation has any agreement (other than this Agreement) or option or right capable of becoming an agreement or option for the purchase from Fair Enterprise of any of the Purchase Shares.

3.2 Representations and Warranties of MID.

MID hereby represents and warrants to Fair Enterprise as follows and acknowledges that Fair Enterprise is relying on such representations and warranties in connection with its disposition of the Purchase Shares:

(a): MID is a corporation existing under the laws of Ontario and has the corporate power to enter into and perform its obligations under this Agreement;
(b): this Agreement is a legal, valid and binding obligation of MID, enforceable against MID by Fair Enterprise in accordance with its terms except as enforcement may be limited by bankruptcy, insolvency and other laws affecting the rights of creditors generally and except that equitable remedies may be granted only in the discretion of a court of competent jurisdiction; and
(c): the Exchange Shares, when issued, will be issued to Fair Enterprise as fully-paid and non-assessable shares.

3.3 Survival.

The representations and warranties set out in this Article 3 shall survive the purchase and sale of the Purchase Shares herein provided for and shall continue in full force and effect for the benefit of the party in whose favour they are expressed to be made indefinitely.

ARTICLE 4
FURTHER ASSURANCES

4.1 Further Assurances.

Upon the request from time to time of the other party, each party shall execute all such transfers, assignments, notices and other documents, shall use its reasonable efforts to obtain all such consents and approvals (provided that such party shall not be required to make any payments to obtain the same) and shall do all such other acts and things as the other party, acting reasonably, may consider necessary or advisable effectively to have the Purchase Shares or the Exchange Shares, as applicable, registered in the name of such party.

IN WITNESS WHEREOF the parties have executed this Agreement as of the date first above written.

		FAIR ENTERPRISE LIMITED
		By:
			Name: Title:
		MI DEVELOPMENTS INC.
		By:
			Name: Title:
		By:
			Name: Title:

QuickLinks

SHARE PURCHASE AGREEMENT
EX-3 4 a2140103zex-3.htm EXHIBIT 3
QuickLinks -- Click here to rapidly navigate through this document

Exhibit C

MI Developments Inc.
455 Magna Drive
Aurora, Ontario L4G 7A9
Tel (905) 713-6322
Fax (905) 713-6332

PRESS RELEASE

For immediate release

MI DEVELOPMENTS ANNOUNCES OFFER TO TAKE MAGNA ENTERTAINMENT PRIVATE

July 13, 2004, Aurora, Ontario, Canada — MI Developments Inc. (TSX: MIM.A, MIM.B; NYSE: MIM) ("MID") today announced its intention to make an offer to acquire all the outstanding shares of Class A Subordinate Voting Stock of Magna Entertainment Corp. (TSX: MEC.A; NASDAQ: MECA) ("MEC") not currently owned by MID for consideration of US$1.05 in cash and 0.2258 of an MID Class A Subordinate Voting Share per share of MEC Class A stock. If the offer is completed, MID intends to acquire any shares of MEC Class A stock not tendered in the offer through a merger of MEC with a wholly-owned subsidiary of MID in which MEC shareholders would receive the same consideration per share of MEC Class A stock.

The consideration represents an offer price of US$7 per share of MEC Class A stock based upon the closing price of US$26.35 for the MID Class A shares on the NYSE on July 12, 2004. This offer price represents a premium of 21.5% over MEC's closing market price on NASDAQ yesterday and a 30.4% premium over MEC's average closing market price on NASDAQ for the previous 30 trading days.

Brian Tobin, Chief Executive Officer of MID stated: "We believe this offer represents an attractive opportunity for MEC shareholders. Not only does our offer provide MEC shareholders with a substantial premium to current trading prices, it also allows MEC shareholders, through ownership of MID shares, to participate in the future growth of MID and to continue to participate in the future growth of MEC."

MID currently owns all the shares of MEC Class B stock and approximately 16.5% of the outstanding MEC Class A stock, representing in the aggregate 96.6% of the votes attached to MEC's outstanding securities and a 62% equity interest in MEC. The number of shares of MEC Class A stock not owned by MID is approximately 40.8 million. If all MEC shareholders tender into the offer, MID estimates that it will pay approximately US$42.9 million in cash in the aggregate and will issue approximately 9.2 million Class A shares, resulting in a transaction value based upon yesterday's MID closing market price of approximately US$285.8 million.

"We indicated in recent months that MID was exploring ways in which it could grow and diversify its real estate portfolio," Mr. Tobin continued. "We believe that the development of MEC's underutilized lands and certain of its racing assets into destination retail/entertainment centers represents an attractive investment opportunity for MID. We believe that these developments and other opportunities for growth in MEC, including slot/video lottery terminal opportunities and improved racing operations, can best be realized with MID's direct assistance and participation. Taking MEC private will improve MEC's ability to execute its strategy by improving its ability to obtain financing."

The making of the offer was approved by a Special Committee of independent directors of MID comprised of Messrs. Barry Byrd, who acted as Chairman, Philip Fricke and Manfred Jakszus. The offer will constitute an "insider bid" for Canadian securities law purposes, and MID will be required to include in its offering materials an independent formal valuation of MEC prepared under the supervision of an independent committee of the MEC Board of Directors.

MID will mail the offering materials containing information concerning the transaction, MID and MEC promptly after its receipt of the formal valuation of MEC, expected in a few weeks. In addition to customary conditions, including receipt of certain regulatory approvals, the offer will be conditioned on the tender of:

•: at least a majority of the shares of MEC Class A stock not held by MID or related parties of MID; and
•: such number of shares of MEC Class A stock such that MID would hold at least 90% of the total number of the then outstanding shares of MEC Class A stock (after taking into account the shares of MEC Class A stock currently held directly or indirectly by MID and the conversion of up to all the shares of MEC Class B stock held directly or indirectly by MID into shares of MEC Class A stock).

No offer will be made for MEC's outstanding 7.25% convertible notes due 2009 or its 8.55% convertible notes due 2010. Following completion of the proposed privatization, the convertible notes will be convertible into MID Class A shares and a cash payment as contemplated by the note indentures at a conversion price based on the merger consideration. MEC options will become exercisable for MID Class A shares based on the merger consideration.

MID also announced that it has purchased today from Fair Enterprise Limited, a company controlled by Frank Stronach (the Chairman of MID and MEC and a trustee of the controlling shareholder of MID) and by members of the Stronach family, 3,682,515 shares of MEC Class A stock (approximately 7.5% of the outstanding MEC Class A stock) for US$0.89 and approximately 0.1922 of an MID Class A share per share of MEC Class A stock representing a price of US$5.96 per share. The price was based on the weighted average market price of the MEC Class A stock on NASDAQ for the five trading days ending on July 12, 2004 and on the weighted average market price of the MID Class A shares on the NYSE for the five trading days ending on July 12, 2004, meaning that no premium was paid by MID to Fair Enterprise for the acquisition of MEC shares. The issuance of MID Class A shares to Fair Enterprise is subject to regulatory approval.

Mr. Stronach said: "I believe the offer and merger are in the best long-term interests of both MEC and MID shareholders and I strongly support this transaction. Fair Enterprise sold its MEC shares to MID at market prices so that shareholders would know that I will participate in this transaction solely through my investment in MID, and I will not benefit by tendering MEC shares into the offer."

About MID and MEC

MID is a real estate operating company engaged in the ownership, development, management, leasing and acquisition of industrial and commercial real estate properties located in North America and Europe. Virtually all its income-producing properties are under lease to Magna International Inc. and its subsidiaries. MID also holds a controlling investment in MEC, North America's number one owner and operator of horse racetracks, based on revenues, and one of the world's leading suppliers, via simulcasting, of live racing content to the growing inter-track, off-track and account wagering markets.

Analyst Presentation

We will hold a conference call for interested analysts and shareholders to discuss the transaction on Tuesday, July 13, 2004 at 8:30 a.m. New York/Toronto time. The number for North American callers is 1-800-796-7558. The number for overseas callers is 416-640-4127. Please call 10 minutes prior to the start of the conference call. MID will also webcast the conference call at www.midevelopments.com. The conference call will be chaired by Brian Tobin, Chief Executive Officer, and John Simonetti, Vice-President and Chief Financial Officer. For anyone unable to listen to the scheduled call, the rebroadcast numbers will be: 1-877-289-8525 (North America) and 416-640-1917 (overseas). The reservation number is 21056897 # and the rebroadcast will be available until Tuesday, July 20, 2004.

Media Call

We will also hold a media call for media representatives to discuss the transaction on Tuesday, July 13, 2004 at 10:30 a.m. New York/Toronto time. The number for North American callers is1-800-814-3911. The number for overseas callers is 416-640-4127. Please call 10 minutes prior to the start of the media call. The media call will be chaired by Brian Tobin, Chief Executive Officer, and John Simonetti, Vice-President and Chief Financial Officer. For anyone unable to listen to the scheduled call, the rebroadcast numbers will be: 1-877-289-8525 (North America) and 416-640-1917 (overseas). The reservation number is 21056901 # and the rebroadcast will be available until Tuesday, July 20, 2004.

For further information about this media release, please contact John Simonetti at (905) 726-7619. For teleconferencing questions, please call Susan Fitzgerald at (905) 726-7106.

Forward-Looking Statements

The contents of this press release may contain "forward-looking statements" within the meaning of Section 27A of the United States Securities Act of 1933 and Section 21E of the United States Securities Exchange Act of 1934. Forward-looking statements may include, among others, statements regarding MID's future plans, costs, objectives or economic performance, or the assumptions underlying any of the foregoing. In this press release we use words such as "may", "would", "could", "will", "likely", "believe", "expect", "anticipate", "intend", "plan", "forecast", "project", "estimate" and similar words to identify forward-looking statements. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or the times at or by which such future performance will be achieved. Forward-looking statements are based on information available at the time and/or management's good faith belief with respect to future events and are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond MID's control. MID expressly disclaims any intention and undertakes no obligation to update or revise any forward-looking statements to reflect subsequent information, events or circumstances or otherwise.

Where to Find Additional Information About the Transaction

This press release is neither an offer to purchase securities nor a solicitation of an offer to sell securities of MEC. At the time the expected offer is commenced, MID will file an offer to purchase/prospectus with the United States Securities and Exchange Commission and Canadian securities regulatory authorities and MEC will file a solicitation/recommendation statement with respect to the offer. Investors and stockholders are strongly advised to read the offer to purchase/prospectus (including the offer to purchase, letter of transmittal and related tender documents) and the related solicitation/recommendation statement when they become available because they will contain important information. At that time, investors and stockholders may obtain a free copy of the offer to purchase/prospectus, the related letter of transmittal and certain other offer documents, as well as the solicitation/recommendation statement from the Securities and Exchange Commission's website at www.sec.gov or at www.sedar.com. Free copies of these documents can also be obtained from MID by directing a request to MID, Attention: General Counsel, 455 Magna Drive, Aurora, Ontario, Canada L4G 7A9, (905) 713-6322. YOU SHOULD READ THE OFFER TO PURCHASE/PROSPECTUS CAREFULLY BEFORE MAKING A DECISION CONCERNING THE OFFER.

QuickLinks

PRESS RELEASE
EX-4 5 a2140103zex-4.htm EXHIBIT 4

Exhibit D

MI Developments Inc.
337 Magna Drive
Aurora, Ontario, Canada L4G 7K1
Tel (905) 726-2462
Fax (905) 726-7177

July 12, 2004

Board of Directors
Magna Entertainment Corp.
337 Magna Drive
Aurora, Ontario L4G 7K1

Attention:

Mr. Jim McAlpine
President and Chief Executive Officer and Director

Gentlemen:

As you know, we currently own all the shares of Magna Entertainment Corp.'s outstanding Class B Stock and approximately 16.5% of MEC's outstanding shares of Class A Subordinate Voting Stock, representing in the aggregate 96.6% of the votes attached to MEC's outstanding securities and a 62.0% equity interest in MEC. As your largest shareholder, we have for some time been considering the best way for us to participate with MEC in developing its real estate, racing operations and other assets.

It has become clear to us that the best interests of our respective shareholders will be served by our acquisition of the shares of MEC that we do not already own. We believe that the development of MEC's underutilized lands and certain of its racing assets and other opportunities for growth (including slot/video lottery terminal opportunities and improved racing operations) can best be realized with MID's direct assistance and participation. In addition, we believe that taking MEC private will improve MEC's ability to execute its strategy by improving MEC's ability to obtain financing.

Accordingly, our Board of Directors has authorized us to make an offer pursuant to which MEC stockholders would receive US$1.05 and 0.2258 of an MID Class A Subordinate Voting Share per share of MEC Class A Subordinate Voting Stock. If the offer is completed, we intend to acquire any shares of MEC Class A stock not tendered in the offer through a merger of MEC with a wholly owned subsidiary of MID in which your shareholders (other than those who exercise their appraisal rights) would receive the same consideration per share of MEC Class A stock. The offer will be conditioned upon, among other things, the tender of (i) at least a majority of the shares of MEC Class A stock not held by MID or related parties of MID and (ii) a number of shares of MEC Class A stock such that MID would hold at least 90% of the total number of the then outstanding shares of MEC Class A stock (after taking into account the conversion of up to all the shares of MEC Class B stock held directly or indirectly by MID into shares of MEC Class A stock). We enclose a copy of the press release we are issuing prior to the open of business tomorrow in connection with the offer.

Our proposal presents an attractive opportunity for MEC and its shareholders. Our offer represents a price of US$7.00 per share of MEC Class A stock, based upon the closing price of US$26.35 for the MID Class A shares on the NYSE on July 12, 2004. This price represents a premium of 21.5% over today's closing market price of the MEC Class A stock on NASDAQ and a 30.4% premium over the average closing market price of MEC Class A stock for the previous 30 trading days on NASDAQ.

Our offer is being made directly to MEC shareholders. We believe that it will be favourably received by them due to the substantial premium to MEC's market price, the attractiveness of MID Class A shares and the advantages of the acquisition described above. MEC stockholders, through their ownership of MID Class A shares, will participate in MID's business, while continuing to participate in MEC's business. We are not seeking, and because the offer will be made directly to MEC's stockholders, Delaware law does not require, approval of the offer from MEC's Board of Directors.

Because our offer will constitute an "insider bid" for purposes of Canadian securities regulations, MID will be required to include in its offering materials an independent formal valuation of MEC prepared under the supervision of an independent committee of MEC's Board of Directors. We hereby request that you furnish us with such required valuation. We will bear the costs of the valuation. We also request that information that is made available to your financial advisors and to the valuator be shared, on a confidential basis, with us and our advisors. We intend to file our offering materials with the Securities and Exchange Commission and Canadian securities regulatory authorities and commence our offer promptly upon receipt of the required valuation, which we hope will be completed in a timely manner. We and our advisors are prepared to meet immediately with you and your advisors to assist you and your independent valuators in considering our proposal. Please advise us of the manner in which you and your board of directors would like to proceed.

We look forward to working with you to conclude this transaction successfully and to increase value for our respective shareholders.

		Very truly yours,
		/s/ Brian V. Tobin
		Brian V. Tobin Chief Executive Officer

GRAPHIC 6 g396977.jpg G396977.JPG begin 644 g396977.jpg M_]C_X``02D9)1@`!`0$`C`",``#__@`\1$E32S`Q-3I;,#143U(R+C`T5$]2 M,3@P,BY/5510551=34%'3D%?34E$7T=215DQ,5],3T=/+D504__;`$,`!P4& M!@8%!P8&!@@(!PD+$@P+"@H+%Q`1#1(;%QP<&A<:&1TA*B0='R@@&1HE,B4H M+"TO,"\=(S0X-"XW*BXO+O_;`$,!"`@("PH+%@P,%BX>&AXN+BXN+BXN+BXN M+BXN+BXN+BXN+BXN+BXN+BXN+BXN+BXN+BXN+BXN+BXN+BXN+BXN+O_``!$( M`%,`=0,!(@`"$0$#$0'_Q``;``$``P$!`0$`````````````!08'!`,(`O_$ M`$D0``$#`P$$!@,'$0D```````$"`P0`!1$&$A,A,0=!46%Q@2*1L10R-F*A MLL(5%C0U0E)5'P!B,SLO_:``P#`0`"$0,1`#\`^D:4JGZRU1]3`8$` MI,U0]-?,-#_E7$DC8V[3E/3T\E1((XQF5*WW4=NLR2E]PN2",I8;XJ/CV#QJ M@W/6UXEDIC*1#;[&QE7^X_R`JL.+6ZXIQQ:EK45*54)OJFP``L%WP+Q=+?@0YSK2 M1]QG*?4>%6^SZ]6%):NT<%/+?,CCYI_IZJH-*FCGDC\)5.HP^GJ!WVY\1D5O M<*7&FQTR(CR'65T/\M/5CO/;5BO-XBVE,8R5`!]X-CCR!YJ\!6=VC6#0V6UJ41@=0(Z\5`W6Y3+M*,F:YMKQ@)`PE([`*9"J9'$&QZK,.PBHJ M:ISZ@]WX[MUN"W4L*T> MC:XF".8;%9KH;X4P?U_F&K_HN?[KM[\=2LN19"VS^+M$I^3AY4RHW!S;.'[D MLQC,;XY"Z(D``7S.\G/Y+*KG#7`N,F$YS9<*<]HZCZL5UZ9MXN=[BQ5IRSM; M;H^(GB?7P'G5BZ2[?NIT>XH3Z+Z=VL_&3R^3V5'V/_#M/SKGR>E.)ALGKP3E M9]7LJKV0;,6G09]$W%89:$2-\3LNNGRU6B_6[8_P3$_=BLINT]EV6E+=KA1T MQWE<&D$;P`\E=W#Y:VSJK!)WV;)_++^<:LUUF`;*5X`3*]YD)-K;SS6B:08M M=\AR'Y-DM[:FW=@!MO@1@'K\:\-9)MMC]R"-8[RG+L3)4!S+9Y M^K@?7674BJH]B4\UOL)J1/2MXC(]/PK!H;X4P?U_F&I'1<_W)JF3&4K#D]@QDUBLN6N==7)CGOGG]OP!5P'JQ5NM+0`1J M?1)\$;(XN:[PLN>I%O2ZW:L$G?9LG\LOYQK>ZP2=]FR?RR_G&O,1T:O?XWXI M.GU6B]&'VKF_G'T17'TH\[9^T^C79T8?:N;^I/>2P\23X MTH0KXM(6DI4`4D8(/761:OTZY9Y9?803`=/H'_3/WI_E6O5Y26&9+"V'VTN- M+&%(4,@BH)X!*VQU5_#Z]]')M#,'4+)-/WJV6@MOFT+>G(!&^W^!Q[$XX<.% M<=ZG6N'WP^7Q MJF+2IM:FUI4E:3@I4,$>5*9>U8-APR^"UU)[+4/]HB<2=^9\B+_C@I]C4CS. MF7;&&B2LE*7=KWJ"SCVU'TJ/M7$@GW4&,MT]9'!*?$\A4CIY)>Z<^BKQ4%+27>WN\XE;!`0I6T6P<$C/;P&:@M,:2CVHI MERE!^;U''HM_B]_?5KII3LD#?[/)9/$IJ=\GNX/,DG/S43J"/>I$9I-DN#$- MX+RM;S.\"DX/#'CBLX9Z,KVQ<$7!N]0Q)0]ODJW"B-O.8XTI7A`.173'N8=IIL5E6H[?$A2E MHC-%"0>`VU'VFH5"4E8!'"E*1S-`?8+>T4CW0-+C24)``\J4IM`UH8"`L=B$LCYW!SB; -----END PRIVACY-ENHANCED MESSAGE-----