2 Min Read
TORONTO, Nov 30 (Reuters) - Telus Corp said on Friday that it believed U.S. hedge fund Mason Capital Management LLC has begun to sell down its positions in the telecom company, which can now resume selling shares to foreign investors.
Mason's investment forced Telus to disallow foreigners from acquiring shares of the company because Canadian laws prohibit foreign ownership of more than 33.3 percent in any large Canadian telecom player.
Mason had accumulated simultaneous long and short positions on the company's voting and nonvoting shares, and stood to benefit if Telus' plan to consolidate the two classes of stock on a 1-for-1 basis failed.
The two sides have been locked in a war of words for months. Mason has said Telus' voting class shareholders should be rewarded as the two classes merge because they paid more for their stock than nonvoting shareholders did. Telus said it did not see the need for paying a premium as universal voting rights amounted to good corporate governance.
Last month, Telus shareholders dealt a blow to Mason, voting to approve the company's share exchange plan. Mason has sued to block the plan, however, and a court ruling in the matter is expected in coming weeks.
Telus said its foreign ownership had fallen to about 15 percent on Nov. 16 from nearly 33 percent in July.
As a result, Telus can allow foreigners to acquire its shares gain, it said.
Telus said it also had observed a significant reduction in the short positions in its voting and nonvoting shares.
"Based in part on this change in foreign ownership levels and short trading positions, Telus believes Mason Capital has materially reduced both its long and short positions," Telus said in its statement.
In August, Mason had disclosed an ownership stake of close to 19 percent of Telus' voting shares.
A spokesman for Mason declined to comment on its investment.
Telus' voting shares rose 53 Canadian cents to C$65.10 in early trading on the Toronto Stock Exchange, while the nonvoting shares were up 41 Canadian cents at C$64.15.