The Divisional Court of Ontario Monday upheld a lower court ruling on Magna International's planned payout of nearly $1 billion to founder Frank Stronach.

Opponents of the plan to pay Stronach to give up control of the auto parts giant had argued that Justice J.H. Wilton-Siegel of the Ontario Superior Court erred in his decision Aug. 17 to approve the plan.

Lawyers for Magna argued it was not up to the courts to rule on what a fair price is, but to leave that to shareholders. (Markus Leodolter/Associated Press)

"We find that there were no palpable or overriding errors in his findings of fact and, indeed, we agree with those findings of fact," the three judges said in their decision.

The dissident shareholders included the Canada Pension Plan Investment Board, Ontario Teachers' Pension Plan, OMERS, the Alberta Investment Management Corp. and British Columbia Investment Management Corp.

They had argued that Justice Wilton-Siegel placed too much emphasis on a shareholder vote and the rise in the company's shares after the plan was announced.

Stronach would receive $300 million US in cash, $120 million in consulting fees over the next four years, nine million single-vote shares of Magna and control over a new joint venture focused on electric vehicles.

The opponents said Justice Wilton-Siegel should have paid more attention to weighing the costs to common shareholders against the potential benefits to Stronach.

Magna's common shareholders earlier voted 75 per cent in favour of the plan.

Benefits include higher share price

Management of Magna, based in Aurora, Ont., had argued that simplifying its ownership structure would eliminate the 30 per cent discount the firm's shares have carried relative to its rivals.

It also said it was not up to the courts to rule on what a fair price is, but to leave that to shareholders.

The opposing shareholders can still try to appeal to the Court of Appeal for Ontario and then to the Supreme Court of Canada after that.

If they do, that makes its unlikely the deal will be made final by the deadline of Aug. 31.

The terms of the deal allow either side to walk away from it at that time, but Magna has said the deadline could be extended if both parties agree.