-----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, MgmbbGZMYjSimTEP/jO8ZbASLN+Ib8Cr0MuajlXc8WDjIXYein7EloKnt0GFD1zT 2txg2D8HIflsgX9H0vkAUQ== 0001164833-08-000113.txt : 20080516 0001164833-08-000113.hdr.sgml : 20080516 20080516164811 ACCESSION NUMBER: 0001164833-08-000113 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20080516 DATE AS OF CHANGE: 20080516 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MI DEVELOPMENTS INC CENTRAL INDEX KEY: 0001252509 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 000000000 STATE OF INCORPORATION: A6 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-79210 FILM NUMBER: 08842950 BUSINESS ADDRESS: STREET 1: 455 MAGNA DR STREET 2: AURORA ONTARIO CITY: CANADA STATE: A6 ZIP: L4G7A9 BUSINESS PHONE: 9057136322 MAIL ADDRESS: STREET 1: 455 MAGNA DR STREET 2: AURORA ONTARIO CITY: CANADA STATE: A6 ZIP: L4G7A9 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HOTCHKIS & WILEY CAPITAL MANAGEMENT LLC CENTRAL INDEX KEY: 0001164833 IRS NUMBER: 954871957 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 725 SOUTH FIGUERORA ST 39TH FLOOR CITY: LOS ANGELES STATE: CA ZIP: 90017 BUSINESS PHONE: 2134301000 MAIL ADDRESS: STREET 1: 725 SOUTH FIGUEROA ST 39TH FLOOR CITY: LOS ANGELES STATE: CA ZIP: 90017 SC 13D/A 1 mim13d01.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 1)* MI Developments Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Class A Subordinate Voting Shares - -------------------------------------------------------------------------------- (Title of Class of Securities) 55304X104 - -------------------------------------------------------------------------------- (CUSIP Number) Anna Marie Lopez Hotchkis and Wiley Capital Management, LLC 725 South Figueroa Street, 39th floor Los Angeles, California 90017-5439 (213) 430-1896 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) May 16, 2008 - -------------------------------------------------------------------------------- (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 Sections 240.13d-1(e), 13d-1(f) or 240.13d-1(g), check the following box [ ]. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7 for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). (Continued on following pages) 13D =================== CUSIP No. 55304X104 =================== - ------------==================================================================== NAMES OF REPORTING PERSONS 1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY) Hotchkis and Wiley Capital Management, LLC 95-4871957 - ------------==================================================================== CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [ ] 2 - ------------==================================================================== 3 SEC USE ONLY - ------------==================================================================== SOURCE OF FUNDS (See Instructions) 4 OO - ------------==================================================================== CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT 5 TO ITEMS 2(d) OR 2(e) [ ] - ------------==================================================================== CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware - ------------==================================================================== SOLE VOTING POWER 7 NUMBER OF 4,319,900 ------------=========================================== SHARES SHARED VOTING POWER BENEFICIALLY 8 OWNED BY -0- ------------=========================================== EACH SOLE DISPOSITIVE POWER 9 REPORTING 5,379,100 PERSON WITH ------------=========================================== SHARED DISPOSITIVE POWER 10 -0- - ------------==================================================================== AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 5,379,100 shares (Ownership disclaimed pursuant to Section 13d-4 of the 1934 Act) - ------------==================================================================== CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES 12 CERTAIN SHARES (See Instructions) [ ] - ------------==================================================================== PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 11.7% - ------------==================================================================== TYPE OF REPORTING PERSON (See Instructions) 14 IA - ------------==================================================================== 13D =================== CUSIP No. 55304X104 =================== - ------------==================================================================== NAMES OF REPORTING PERSONS 1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY) Hotchkis and Wiley Mid-Cap Value Fund 95-4607961 - ------------==================================================================== CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [ ] 2 - ------------==================================================================== 3 SEC USE ONLY - ------------==================================================================== SOURCE OF FUNDS (See Instructions) 4 OO - ------------==================================================================== CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT 5 TO ITEMS 2(d) OR 2(e) [ ] - ------------==================================================================== CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware - ------------==================================================================== SOLE VOTING POWER 7 NUMBER OF 2,533,400 ------------=========================================== SHARES SHARED VOTING POWER BENEFICIALLY 8 OWNED BY -0- ------------=========================================== EACH SOLE DISPOSITIVE POWER 9 REPORTING 2,533,400 PERSON WITH ------------=========================================== SHARED DISPOSITIVE POWER 10 -0- - ------------==================================================================== AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 2,533,400 shares - ------------==================================================================== CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES 12 CERTAIN SHARES (See Instructions) [ ] - ------------==================================================================== PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 5.5% - ------------==================================================================== TYPE OF REPORTING PERSON (See Instructions) 14 IV - ------------==================================================================== Item 1. Security And Issuer - ------ ------------------- This statement on Schedule 13D relates to Class A Subordinate Voting Shares (the "Class A Shares") of MI Developments Inc. (the "Company"). The Company's principal offices are located at 455 Magna Drive, Aurora, Ontario, Canada L4G 7A9. Item 2. Identity And Background - ------ ----------------------- Preliminary Note: This statement is filed on behalf of Hotchkis and Wiley Capital Management, LLC ("HWCM") and Hotchkis and Wiley Mid-Cap Value Fund ("HW Fund"). HWCM and HW Fund are collectively referred to as "Reporting Persons". (a) HWCM (i) State or other place of its organization: Delaware (ii) Principal business: registered investment advisor (iii) Address of its principal office: 725 South Figueroa Street, 39th Floor Los Angeles, CA 90017-5439 (iv) Criminal Conviction: HWCM has not been convicted in a criminal proceeding during the last five years. (v) Court or Administrative Proceedings: HWCM has not been a party to a civil proceeding or judicial body, or subject to a judgment or a decree enjoining future violations. (b) HW Fund (i) State or other place of its organization: Delaware (ii) Principal business: investment company (iii) Address of its principal office: 725 South Figueroa Street, 39th Floor Los Angeles, CA 90017-5439 (iv) Criminal Conviction: The Fund has not been convicted in a criminal proceeding during the last five years. (v) Court or Administrative Proceedings: The Fund has not been a party to a civil proceeding or judicial body, or subject to a judgment or a decree enjoining future violations. Item 3. Source And Amount Of Funds And Other Consideration - ------- -------------------------------------------------- (a) HWCM* HWCM purchased the Class A Shares on behalf of its clients in the ordinary course of business, using the investment capital of its clients. The Class A Shares were acquired at an average price of approximately $26.34 per share (including commissions). The amount of investment capital used to purchase the Class A Shares was approximately $140,018,376 (including commissions). *Note that the average share price and amount of investment capital used to purchase the Class A Shares includes those Class A Shares reported below by HW Fund. (b) HW Fund HW Fund purchased the Class A Shares in the ordinary course of business, using its investment capital. The Class A Shares were acquired at an average price of approximately $27.82 per share (including commissions). The amount of investment capital used to purchase the Class A Shares was approximately $70,466,823 (including commissions). Item 4. Purpose Of The Transaction - ------ -------------------------- The purpose of the acquisition of the Class A Shares was and is for investment, and the acquisitions of the Class A Shares by each of the clients of HWCM were made in the ordinary course of business and were not made for the purpose of acquiring control of the Company. As stated below in paragraph 3 of this Item 4, HWCM may now be deemed to be seeking to influence the Company's policies Although no Reporting Person has any specific plan or proposal to acquire or dispose of Class A Shares, consistent with its investment purpose, each Reporting Person may, at any time acquire additional Class A Shares or dispose of any or all of its Class A Shares depending upon an ongoing evaluation of the investment in the Class A Shares, prevailing market conditions, other investment opportunities, liquidity requirements of the Reporting Person and/or other investment considerations. No Reporting Person has made a determination regarding a maximum or minimum number of Class A Shares which it may hold at any point in time. Also, consistent with their investment intent, the Reporting Persons have communicated and intend as appropriate in the future to communicate their opinion and make recommendations to the Special Committee of independent directors of MI Developments (NYSE: MIM) (referred to as "MID") regarding the proposed deal ("Deal") between MID and Mr. Frank Stronach. The communications may include discussions on a specific course of actions for the Special Committee to consider related to the Deal, and may also include discussion on Company's policies, including but not limited to its operations, structure and potential strategies to maximize shareholder value. The Reporting Persons have, as noted, made certain recommendations to the Special Committee of Independent Board Members. A copy of additional correspondence since its initial letter to the Special Committee dated April 14, 2008 is attached as an exhibit hereto. During the course of such communications, the Reporting Persons' advocacy of one or more courses of action may be deemed an attempt to influence control over the Company's policies. Except to the extent the foregoing may be deemed a plan or proposal, none of the Reporting Persons has any plans or proposals which relate to, or could result in, any of the matters referred to in paragraphs (a) through (j),inclusive, of the instructions to Item 4 of Schedule 13D. The Reporting Persons may, at any time and from time to time, review or reconsider their position and/or change their purpose and/or formulate plans or proposals with respect thereto. Item 5. Interest In Securities Of The Issuer - ------- ------------------------------------ (a) The percentage amount set forth in Row 13 for all cover pages filed herewith is calculated based upon the 46,160,564 Class A Shares outstanding as of March 31, 2008 as reported by the Company in its Report of Foreign Private Issuer on Form 6-K for the month of May, 2008 filed with the Securities and Exchange Commission on May 7, 2008. (b) Number of shares as to which the person has: (i) Sole power to vote or to direct the vote: (a) HWCM - 4,319,900 (includes ownership reported by HW Fund below) (b) HW Fund - 2,533,400 (ii) Shared power to vote or to direct the vote: (a) HWCM - 0 (b) HW Fund - 0 (iii) Sole power to dispose or to direct the disposition of: (a) HWCM - 5,379,100 (includes ownership reported by HW Fund below) (b) HW Fund - 2,533,400 (iii) Shared power to dispose or to direct the disposition of: (a) 0 (b) 0 Note that certain of HWCM's clients have retained voting power over the Class A Shares that they beneficially own. Accordingly, HWCM has the power to dispose of more Class A Shares than it can vote. (c) Information concerning transactions relating to the shares offered through open market transactions by the reporting persons during the past sixty days are listed below. NONE (d) The securities as to which this Schedule is filed by HWCM, in its capacity as investment adviser, are held in HWCM clients' custodial accounts for the benefit of its clients. These clients have the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of, such securities. No such client is known to have such right or power with respect to more than five percent of this class of securities, except as follows: HW Fund: The Board of Trustees of the HW Fund can direct the disposition of dividends received by such fund and can dispose of such securities. HWCM disclaims beneficial ownership of all securities owned for the benefit of its clients. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings Or - ------ ------------------------------------------- Relationships With Respect To Securities Of The Issuer ------------------------------------------------------ Except as described above, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the Reporting Persons or between such persons and any other person with respect to any securities of the Company, including but not limited to the transfer or voting of any securities of the Company, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, divisions of profits or loss, or the giving or withholding of proxies. Item 7. Materials To Be Filed As Exhibits --------------------------------- Letter to the Special Committee of the Independent Board Members of the Company. 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. Date: May 16, 2008 Hotchkis and Wiley Capital Management, LLC By: /s/ Anna Marie Lopez Name: Anna Marie Lopez Title: Chief Operating Officer Hotchkis and Wiley Mid-Cap Value Fund By: /s/ Anna Marie Lopez Name: Anna Marie Lopez Title: President EX-1 2 mimltr2.txt HOTCHKIS AND WILEY CAPITAL MANAGEMENT 725 South Figueroa Street, 39th Floor - Los Angeles, California 90017-5439 - Tel 213.430.1000 - Fax 213.430.1001 - www.hwcm.com May 14, 2008 To the Special Committee of Independent Board Members: John Barnett, Director Neil G. Davis, Director Philip K. Fricke, Director Manfred Jakszus, Director c/o MI Developments, Inc. 455 Magna Drive Aurora, Ontario Canada L4G 7K1 Dear Special Committee of Independent Board Members: As long term, patient shareholders, we would like to share with you our analysis of the value of MI Developments (MID). We believe that if MID were run optimally, the company would be worth $50.81 per share. (See the attached exhibit) Again, we reiterate our desire that you recommend against the proposed reorganization based on the egregious and unnecessary value transfer from existing shareholders to Mr. Stronach. Sincerely, /s/ David Green David Green Principal and Portfolio Manager Disclosure Statement This letter does not constitute an offer to sell or the solicitation of an offer to buy any securities. Investment analyses are proprietary and confidential and generally based on publicly available information (including information obtained from company management). Certain information may have been obtained from proprietary broker-dealer and/or independent third-party research. Information obtained from these sources is considered reliable, but its accuracy or completeness cannot be guaranteed. The research herein is not intended to be, and should not be, relied on for investment advice. Any forecasts and estimates made cannot be guaranteed. The opinions expressed are as of May 14, 2008, and are subject to change and may not be accurate reflections after that date. Exhibit to Letter VALUE OF REAL ESTATE: Real Estate Revenues $186mm G&A $20mm D&A $44mm Interest Expense $70.5mm ($1 billion of debt at LIBOR + 450bps) ------- Pre-Tax Income $51.5 mm Taxes $10.3mm (20% tax rate) ------- Net Income $41.2mm ======= CAPEX $0.5mm AFFO $84.7mm (Net Income + D&A-CAPEX) AFFO MULTIPLE 12.5x REAL ESTATE VALUE $2.059 billion = $1.059b ($84.7mm x 12.5) + $1b (new debt) OTHER VALUES: Aurora Land $55mm Other Lands $104mm ($130mm discounted 20%) Note due from MEC $255mm MEC shares $25mm Less Existing Debt ($264mm) Plus Current Cash $139mm ------ TOTAL VALUE: $2.373 billion ============== Shares Outstanding: 46.7mm Value per share: $50.81 -----END PRIVACY-ENHANCED MESSAGE-----