VANCOUVER – Mason Capital Management, the largest Telus shareholder, said it will go ahead with plans to hold a rival meeting of Telus shareholders after the British Columbia Court of Appeal today overturned an earlier court ruling.
“We are pleased by the Court’s ruling, which fully vindicates our position that the voting shareholders of Telus should have the opportunity to vote on a fair exchange ratio share in a share collapse transaction," Mason said in a statement.
It added that voting shareholders will now have the opportunity to have a “say on the critical issue of a fair minimum premium for the Telus voting shares in a share conversion.”
The U.S. hedge fund has been locked in an ongoing dispute with Telus over the telecom’s proposal to consolidate its voting and non-voting shares on a one-for-one basis.
Mason said it has now applied to the Court to arrange a date for its meeting and to request that the Telus shareholder meeting planned for October 17 be delayed. At the Telus meeting both voting and non-voting shareholders are set to vote on the company's share consolidation plan.
"In my view, it is appropriate to allow the parties to work out the logistics for the scheduled meetings, with the assistance of the Supreme Court, as necessary," Justice Harvey Groberman said in his written decision.
"In the exchange proposed by Telus, the common shareholders will see a massive dilution of their voting power without any direct economic compensation or benefit," the judge added.
In Telus’ favour is that the Court also expressed concern about Mason's "empty voting," strategy which Telus has also attacked.
“There is, at the very least, a strong concern that [Mason’s] interests are not aligned with the economic well-being of the company. That said, there is no indication that it is violating any laws, nor is there any statutory provision that would allow the court to intervene on broad equitable grounds. To the extent that cases of “empty voting” are subverting the goals of shareholder democracy, the remedy must lie in legislative and regulatory change,” noted Justice Groberman.
To be continued …
