VANCOUVER – Mason Capital lost its appeal Tuesday in its ongoing battle with Telus to thwart the carrier’s plans to move to a single class of common shares.
The Supreme Court of British Columbia approved Telus’ proposal to exchange its non-voting shares for common shares on a one-for one basis. In a 125-page written decision, the court concluded that the exchange was fair and reasonable and rejected New York hedge fund Mason Capital’s arguments and appeals made in opposing the proposal.
“The arrangement has arisen through a robust process that has been independently and favourably reviewed. The benefits to be achieved by the arrangement are real and substantial,” stated the Court in its decision.
The judge went on to state that “…Mason’s arguments display a lack of regard for the overall circumstances relating to Telus and its shareholders, which are to be considered by this Court in the context of this fairness hearing. As I have earlier stated, Mason can hardly be considered a spokesman for the Common Shareholders when its strategy will result in a loss of value to the other Common Shareholders…Mason’s opposition must be viewed through the lens of its unique strategy, which has nothing to do with the well-being of Telus and its shareholders…”
“This decision is positive for Telus shareholders and supports the overwhelming approval expressed by them at our October 17 shareholder meeting,” said Darren Entwistle, Telus President and CEO. “This decision confirms our proposal is fair and beneficial to all shareholders, is widely supported by shareholders with a true economic stake in our company and is consistent with the principles of good corporate governance. We look forward to completing the share exchange in the near future and moving forward with a share structure that supports excellent corporate governance, share marketability, and enhanced trading performance as a single share class. I would like to thank all of our committed shareholders for their support in this process.”
Entwistle added the decision furthers the carrier’s strategy of enhancing shareholder value, as it will “increase liquidity and marketability of all Telus shares.”
He noted that since Telus originally announced the proposal on February 21, the value of both share classes have been “far stronger than the stock market index and Telus’ peers, in part reflecting strong support from holders of both Telus non-voting and common shares.”
As of December 18, Telus’ non-voting share price was up 20% since the original announcement was made in February of 2012, while the common share price was up 16% – about $3 billion in new shareholder value.
“At the core of enhancing shareholder value over many years have been our excellent financial and operational results which are driving the ability for us to deliver on our dividend growth model. We have delivered globally-leading shareholder returns amongst all of our peers retrospectively, and we believe we have the strategy and team to continue to do it prospectively,” said Entwistle.
