(Reuters) - Trucking company Contrans Group Inc CSS.TO said it will scrap plans to end its dual-class share structure as shareholders did not approve the move.
A single-share structure would have enhanced the acceptance of the company’s shares among institutional shareholders, which have periodically expressed concern with its current structure, Contrans said in April.
The proposal, which included plans to convert each Class B multiple voting share into 1.727 Class A subordinate voting shares, did not receive the required support, Contrans said in a statement on Tuesday.
The Class B multiple voting shares are held by Contrans’ CEO Stan Dunford, directors Robert Burgess and some others.
Dunford owns a 11.75 percent stake in the company, whose top shareholder is Deans Knight Capital Management Ltd.
All Class A subordinate voting shares of Contrans were to be reclassified as common shares following the conversion.
“Contrans does not intend to present any additional proposals of this nature and will continue to focus on its business operations, which remain strong,” the company said.
“We don’t expect any impact as a result of this proposal not receiving support,” said National Bank Financial analyst Cameron Doerksen, maintaining his “sector perform” rating on the stock.
Earlier this month, Canada’s No. 2 telecommunications provider Telus Corp (T.TO) withdrew a similar plan on shareholder opposition, which was led by its largest shareholder Mason Capital Management LLC.
Contrans, which provides shippers with van, dry tank, liquid tank and dump trailing equipment services, on Monday reported a more than 50 percent jump in first-quarter profit and said revenue increased 20 percent on higher demand.
Its shares fell 5 Canadian cents to C$9.10 on Tuesday on the Toronto Stock Exchange.
Reporting by Bhaswati Mukhopadhyay in Bangalore