VANCOUVER – 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 says the telecom. But Mason Capital responded that it participated in the meeting under protest and would be appealing an earlier court decision which allowed the vote to take place.
Of the total shares voted, 81.1% were in favour of Telus' share exchange proposal, with 62.9% of the 128.8 million common shares voting in favour, and 99.5% of the 127.7 million non-voting shares voting in favour. Excluding Mason's most recently reported voting block, 84.4% of common shares voted were in favour of the exchange.
Telus says the voting results easily exceeded the requirements to pass, a simple majority of common shares voted and two-thirds of non-voting shares voted. It noted that excluding Mason's most recently reported voting block, 93% of total shares voted were in favour of the exchange. Voting participation was reported at 73.6% of the common shares outstanding and 84.6% of the non-voting shares outstanding.
New York hedge fund Mason Capital Management has been battling Telus for months over the telecom’s proposal to collapse its two classes of shares on a one-for-one basis. Mason, which held 19% of Telus' voting shares as of August 31, maintains that consolidating the two classes of shares will not create value for all shareholders and urged shareholders to vote against the proposal in favour of its rival resolutions. Telus reports that none of Mason's four resolutions received the support from common shareholders required to pass.
But Mason says it was participating in the meeting under protest according to a statement read by Iain Scott, proxyholder and a partner of McCarthy Tetrault, legal counsel to Mason Capital.
Mason maintains that the meeting did not provide a “meaningful opportunity to consider the matter” since “no proxies at all have been solicited in respect of the Mason resolution,” said Scott.
“The result is that you, Mr. Chairman, now hold proxies that were deposited by shareholders who had no opportunity to consider the implications of that decision, who thought they had no alternative to what Telus is proposing, and who had no idea what the specifics of that alternative were.”
He added that Mason will be appealing the orders Telus obtained from the court on Monday, which Mason believes “disenfranchise the voting shareholders.”
“Mason will also be appealing the decision that only a simple majority approval of the voting shareholders is required for the Telus proposal, which is inconsistent with the requirements of B.C. law and the articles of Telus,” added Scott.
Telus in its release concluded the outcome of the shareholder vote was “distinctly positive for Telus shareholders.”
“Moreover, the result realized exemplifies the principles of good corporate governance and the fairness of shareholder democracy in Canada," said Darren Entwistle, Telus President and CEO.
"We would like to express our gratitude to our shareholders for such strong support of our proposal. Shareholders made clear their desire to enhance shareholder value through improved trading liquidity and augment Telus' already excellent corporate governance by adopting a single class of widely held voting shares. 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."
The final hearing before the B.C. Supreme Court to approve the share exchange is set for the week of November 5.
