Mason Capital allowed to launch appeal in Telus fight

Tue Sep 18, 2012 2:19pm EDT
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By Euan Rocha

TORONTO (Reuters) - Mason Capital Management LLC, the largest shareholder in Telus Corp (T.TO: Quote), said on Tuesday it has been granted permission to launch an expedited appeal of a court ruling that blocked it from calling a meeting of the telecom company's shareholders.

The U.S. hedge fund has been locked in a bitter dispute with Telus for months over the Vancouver-based company's plan to consolidate its voting and non-voting stock on a one-for-one basis. Telus, which backed down on the plan in May, revived the proposal recently.

Mason, which held 19 percent of Telus's voting shares as of August 31, says 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 argues that universal voting rights are a good corporate governance practice.

The Supreme Court of British Columbia ruled recently that Mason and CDS - the registered holder of Mason's voting shares, could not call the meeting. Mason wanted to hold the meeting to get shareholder support for its proposal to set a minimum premium on the price that would be paid for the voting shares in a share consolidation.

Mason said it has been granted an appeal of the ruling and a hearing will be held on October 4, so that the matter may be decided before an October 17 meeting of Telus shareholders at which a vote will be held on Telus's proposal.

The hedge fund said it believes it has strong grounds to appeal, arguing that it is critical that the owners of the Telus voting shares be allowed to vote on setting a minimum premium.

In reaction to Tuesday's news, Telus said the British Columbia court system automatically hears appeals and that Telus is confident the appeal will fail.

A spokesman called on Mason to cease its court proceeding and "simply cast their votes at our meeting".   Continued...