Telus shareholders back share conversion plan in blow to Mason
By Euan Rocha
TORONTO (Reuters) - Telus Corp (T.TO: Quote) shareholders voted on Wednesday in favor of a proposal to exchange the company's non-voting shares for common shares on a one-for-one basis, dealing a blow to top stakeholder Mason Capital, which had argued voting class holders should receive a premium.
Mason Capital Management LLC has been locked in a bitter dispute with Telus for months over the Vancouver-based telecom company's plan to consolidate its voting and non-voting shares on a one-for-one basis.
Mason, which held 19 percent of Telus's voting shares as of August 31, said that voting shareholders paid more, on average, for Telus's stock than non-voting shareholders and should be rewarded for that as the two classes merge. Telus in response argued that universal voting rights are a good corporate governance practice.
"The outcome of today's shareholder vote is distinctly positive for Telus shareholders," Telus Chief Executive Darren Entwistle said in a statement. "Shareholders made clear their desire to enhance shareholder value through improved trading liquidity and augment Telus' already excellent corporate governance by adopting a single class."
Telus said about 81.1 percent of total shares voted were in favor of the company's share exchange proposal.
The telecommunications company has accused the hedge fund of running an "empty voting" strategy, as it holds long and short positions in Telus's stock. It argues that Mason has only a 0.02 percent stake in Telus once the fund's short position is subtracted from the shares it owns.
"Investor views dominated, prevailing over a self-serving hedge fund engaging in a troubling empty voting trading strategy, negative publicity campaign and multiple court challenges to try to defeat this proposal for their own profit," said Entwistle.
A final hearing before the British Columbia Supreme Court to approve the share exchange is set for the week of November 5. Continued...