(Reuters) - Canadian telecommunications provider Telus Corp said a court has ruled that its largest investor, hedge fund Mason Capital Management LLC, cannot hold a meeting of its shareholders to consider a proposal that could have thwarted the company’s share consolidation plan.
The U.S. hedge fund 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 said it would appeal the ruling on an expedited basis to ensure a decision is made before the October 17 shareholders meeting.
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.
Mason maintains 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.
The Supreme Court of British Columbia determined that the actions of Mason Capital were contrary to law and that Mason’s meeting and resolutions will not proceed, Telus said in a statement.
In August, Mason Capital called a shareholder meeting on October 17, the same day as Telus planned to hold a meeting of its own, prompting Telus to say it would ask a court to intervene on its behalf.
Telus added that it will go ahead with its shareholder meeting on the same date.
Telus and its two biggest competitors, BCE Inc’s Bell Canada and Rogers Communications Inc dominate the Canadian telecom market.
Telus’s shares were up 3 Canadian cents at C$61.64 on Wednesday on the Toronto Stock Exchange.
Reporting by Sunayan Bhattacharjee and Ankur Banerjee in Bangalore; Editing by Matt Driskill