Course of Magna’s Tourism Unit

Magna International Inc., Canada’s biggest auto-parts maker, will need to do more than sell a minority stake in its tourism unit if it wants to restore investor confidence and boost a languishing stock, analysts said. Magna created a separate tourism unit called Ventures with a $550-million infusion of cash and assets in March. At today’s annual meeting in Toronto, Magna will detail plans for turning Ventures into a separately traded public company, selling a minority interest in June. Growth prospects for the parts maker have been overshadowed in part by investor concern about Chairman Frank Stronach’s eclectic side businesses, which include the Santa Anita racetrack, and his visions of theme parks and shopping malls. In the last 12 months, Magna’s U.S. shares have fallen 15% to the low 60s. The Aurora, Ontario-based company’s shares would be 10% to 15% higher if investors weren’t worried about the tourism unit draining assets from the auto-parts business, according to Gary Lapidus, a Bernstein & Co. analyst.