Telus Investors Back Plan to Scrap Dual-Share Structure
Telus Corp. (T) shareholders approved the Canadian wireless carrier’s plan to scrap its dual-class share structure over opposition from investor Mason Capital Management LLC.
“Telus shareholders have voted strongly in favour of a proposal to exchange the company’s non-voting shares for common shares on a one-for-one basis,” the Vancouver-based company said in a statement today. None of Mason Capital’s four resolutions received sufficient support from shareholders at the meeting held today, it said.
“Fundamental Telus 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,” Chief Executive Officer Darren Entwistle said in the statement.
Today’s vote is the culmination of a six-month legal battle waged between Telus and the hedge fund over the carrier’s plan to eliminate its dual-share structure by converting all non- voting shares into voting stock on a one-to-one basis. Telus has said it was trying to boost the appeal of its stock as the carrier competes in Canada’s wireless market with larger rivals BCE Inc. (BCE) and Rogers Communications Inc. (RCI/B)
Mason Capital, based in New York, opposed the plan because it would dilute the value of the voting shares it had bought. An original vote on the issue was abandoned by Telus in May after it became clear that the hedge fund could use its stake to block the plan. Mason Capital said in July it had raised its stake in Telus to 19.98 percent, without giving a previous figure.
Telus said in a separate e-mailed statement today that 81 percent of shareholders approved its plan. Excluding Mason Capital, 93 percent endorsed the move, the company said.
Pamela Blum, a spokeswoman for Mason Capital with Sard Verbinnen & Co., didn’t immediately comment on the voting result.
The final hearing before the British Columbia Supreme Court to approve the share exchange is set for the week of Nov. 5, Telus said.
Telus’s voting shares were little changed at C$62.89 at the close in Toronto before the vote. The non-voting shares, which have historically traded at a discount to the voting stock, slipped 0.1 percent to C$62.28.
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