Telus dual-share merger opposed by big shareholder

Wed Apr 11, 2012 6:23pm EDT
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TORONTO (Reuters) - A plan by Telus Corp (T.TO: Quote), Canada's third largest wireless carrier, to discard its dual-share structure faces opposition from its largest shareholder.

Mason Capital Management LLC, a New York-based investor, said on Tuesday it has advised Telus that it intends to vote against the proposal.

Shareholders will vote on the proposal to convert Telus's non voting shares Ta.TO into voting shares on a one-for-one basis at the company's annual meeting on May 9. Two-thirds of shareholders in each class must vote in favor for the proposal to be adopted.

An affirmative vote would lead to Telus listing its shares on the New York Stock Exchange in addition to the Toronto Stock Exchange.

Announcing the proposal in February, Telus said the move would increase liquidity and remove a historical discount on the non-voting shares, which are entitled to the same dividend payout as the voting shares.

It also said it was good corporate governance to allow all shareholders to get one vote for one share.

A source at Telus said on Wednesday that the company believes that Mason's opposition stems from its strategy of trading on the spread between the two types of shares, an arbitrage that would be eliminated if the proposal goes through.

Mason was not immediately available to comment. In a filing to Canadian regulators on Tuesday, It said it held 18.7 percent of Telus's outstanding common shares at the end of March as well as a much smaller share of the non voting stock.

Mason also said it had also borrowed a much larger number of non voting shares.   Continued...

A pedestrian is reflected in the window of a Telus store while using a mobile phone in Ottawa February 11, 2011. REUTERS/Chris Wattie