Canadian Court Says Mason's Telus Meeting Can Proceed |
Date: Monday, October 15, 2012
Author: Reuters
VANCOUVER, British Columbia (Reuters)—Mason
Capital Management LLC, the largest shareholder in Telus Corp., said on
Friday [Oct. 12] an appeals court in British Columbia had overturned a ruling
that had stymied its plan to call a meeting of the Canadian telecommunications
company's shareholders.
The U.S. hedge fund has been locked in a bitter dispute with Telus for months
over the Vancouver-based company's plan to consolidate its voting and non-voting
shares on a one-for-one basis. Telus had
backed down on the plan in May, but
revived it recently. Last month, the Supreme Court of British Columbia ruled that Mason
could not call a meeting of Telus's voting shareholders. Mason had sought
the meeting to get backing for its demand that voting shares be paid a
guaranteed premium in any share consolidation. The hedge fund appealed the ruling, and said on Friday the British Columbia
Court of Appeal had decided in its favor. Despite the victory, it is unclear whether Mason will be able to thwart the
company's plan. Telus already has a shareholder meeting scheduled for Wednesday
[Oct. 17], at which both voting and non-voting shareholders are set to vote on
the share consolidation plan. In light of this, Mason said has it applied to the
court to postpone the meeting. Mason, which held 19 percent of Telus's voting shares as of Aug. 31, argues
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, for its part, argues that universal voting rights are a good corporate
governance practice. It also contends that Mason stands to benefit if it can
maintain a spread between the voting and non-voting shares. The telecom company has accused the hedge fund of running an "empty voting"
strategy, as it holds both long and short positions in Telus's stock. It says
that Mason has only a 0.02 percent stake in Telus once the fund's short position
is subtracted from the shares it owns. "We're looking forward to our Oct. 17 meeting," said Nick Culo, a spokesman
for Telus, in an e-mailed statement. Telus shares closed 10 Canadian cents higher at C$62.71 ($64.02) on the
Toronto Stock Exchange on Friday.
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