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(Reuters) - Telus Corp's (T.TO) largest investor said on Friday it was calling a shareholder meeting on the same day as the Canadian telecom company planned to hold a meeting of its own, prompting Telus to say it would ask a court to intervene on its behalf.
Mason Capital Management LLC is locked in a bitter dispute with Telus over the Vancouver-based company's revived plan to consolidate its voting and non-voting stock on a one-for-one basis.
"Mason Capital's announcement of a second meeting the same day is an absurd tactic designed to confuse shareholders ...," said Telus Chief Executive Robert McFarlane in a statement. He said Mason wanted to profit by widening the spread between the trading price of the company's common and non-voting shares.
Telus's dual-class structure was introduced to comply with restrictions on foreign investment in telecoms after a merger saddled Telus with a major U.S. holder, GTE, now Verizon Communications Inc (VZ.N). Verizon has since sold its stake.
Mason said it is calling its October 17 meeting so holders of voting shares can approve to a measure that would guarantee a premium for their stock in any consolidation.
The U.S. hedge fund, which held 19 percent of Telus's voting shares as of March 31, requested a shareholder meeting in early August, but the Telus board turned it down. Then Telus announced its own meeting for October 17.
For the second time, Telus is asking shareholders to consent to a one-for-one consolidation. It says its proposal needs the support of two-thirds of non-voting shares, but only a simple majority of voting shares.
When Telus first proposed the change in February, it was seeking two thirds of each class. With Mason planning to block the proposal, Telus withdrew it in May.
"Telus's recycled proposal demonstrates the lengths the company is willing to go to circumvent the protections afforded to the voting shareholders under the law," said Mason Principal Michael Martino in a statement.
Mason argues that voting shareholders paid more, on average, for their stock than non-voting shareholders, and should be rewarded for that as the two classes merge. Telus says universal voting rights are consistent with good corporate governance.
Ahead of the first vote, Mason had borrowed a large number of non-voting shares, and thus stood to benefit if their price fell.
On Friday afternoon voting shares were trading at C$62.47, 2.2 percent higher than non-voting shares, compared with 2.4 percent at Thursday's close.
Reporting by Allison Martell; Editing by Frank McGurty