Telus withdraws unified-share plan; profit rises

Wed May 9, 2012 2:23pm EDT
 
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By Alastair Sharp

TORONTO (Reuters) - Telus Corp (T.TO: Quote), one of Canada's largest telecommunications providers, has withdrawn a plan to unify its share structure after the proposal failed to win enough support, in a victory for dissident shareholder Mason Capital.

The Vancouver-based company also posted a 6 percent rise in first-quarter profit as it signed more valuable smartphone customers than expected and set the pace on other wireless industry metrics. But it took a hit on its landline television, Internet and telephone businesses as a rival offered heavy discounts.

"The wireless results were absolutely superb and led the industry in every metric," said Canaccord Genuity analyst Dvai Ghose. "They're clearly the premium wireless carrier in Canada once again."

But Telus suffered a setback in its plan to convert its non-voting shares into voting shares on a one-to-one basis. It could have proceeded only if a two-thirds majority of each class were cast in favor for the proposal.

Telus was due to announce the results of the shareholder vote on Wednesday at its annual meeting in Edmonton, Alberta. Instead, it said it was dropping the proposal, at least for now. Opposition was led by Mason Capital Management LLC, with about 19 percent of voting shares.

Canaccord's Ghose said low turnout by shareholders was to blame. "What defeated Telus today wasn't Mason. ... What defeated Telus essentially was not high enough voter turnout," he said.

REPRISE IS POSSIBLE

Telus, which had the support of two influential advisory firms, said more than 90 percent of non-Mason shares that had been cast supported the move. It did not disclose the overall turnout.   Continued...