Telus bid to block Mason stymied by regulator

Thu May 3, 2012 5:16pm EDT
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CALGARY, Alberta (Reuters) - Regulators won't force a dissident Telus Corp shareholder to reveal how and why it acquired a large block of the Canadian telecom's voting shares ahead of a ballot on whether to give equal status to its non-voting shares.

Telus, the country's No.2 telecommunications provider, had asked the British Columbia Securities Commission to force Mason Capital Management LLC to say when it acquired 19 percent of the voting shares and at what price. It also wanted Mason to detail all its trading in the stock.

Telus shareholders next week will vote on the measure to convert its non-voting shares into voting shares on a one-for-one basis, with results announced 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.

Mason said in a release that it was pleased with the regulator's decision and expected shareholders to reject the company's plan.

"That Telus would bring such complaint in the first place shows how desperate Telus management is to divert shareholders attention away from the fundamental flaws in their misguided proposal," Michael Martino, a principal at the New York-based fund, said in the statement.

Mason believes scrapping the structure would unfairly discriminate against the voting stock's holders, who paid a premium, by diluting the value of the class.

The dual-share setup was designed to comply with laws limiting foreign control of Canadian telecom companies at a time when U.S.-based Verizon Communications Inc was a major investor in Telus.

The company says the set-up is no longer necessary, and its move to merge the two share structure would increase liquidity.

Telus' proposal has the backing of two influential proxy advisory services. Institutional Shareholder Services Inc and Glass, Lewis and Co LLC have recommended that their institutional clients vote in favor of the company's plan.   Continued...