Telus plan for common shares gets strong approval

Telus Corp. will have one class of common shares after shareholders voted strongly in favour of the plan on Wednesday, defeating a U.S. hedge fund’s attempt to get a premium for voting stockholders.

Telus Corp. will have one class of common shares after shareholders voted strongly in favour of the plan on Wednesday, defeating a U.S. hedge fund’s attempt to get a premium for voting stockholders.

Telus (TSX:T) said late Wednesday that shareholder support was solid at a vote held earlier in the day, adding that none of Mason’s Capital Management’s four resolutions received the support from common shareholders required to pass.

Detailed voting results were not immediately available.

The Vancouver-based telecom and New York’s Mason Capital have been battling for months over the Vancouver company’s one-for-one share conversion plan with no premium.

“The outcome of today’s shareholder vote is distinctly positive for Telus shareholders. Moreover, the result realized exemplifies the principles of good corporate governance and the fairness of shareholder democracy in Canada,” chief executive Darren Entwistle aid in a statement.

Entwistle slammed the hedge fund for its tactics.

“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,” Entwistle said.

Telus has converted its dual-class share structure, which separates shares that have voting rights and non-voting A shares (NYSE:TU).

The telecom company said the courts agreed that a simple majority of the common share class and 66.67 per cent of the non-voting share class were required for its proposal to succeed.

Mason has said the threshold for holders of voting shares also should have required two-thirds support.

Mason Capital did not provide any immediate comment.

The hedge fund has repeatedly said holders of Telus’ voting shares should get a premium to approve it, something Telus has said its governing rules don’t require it to do.

The hedge fund had proposed a minimum premium valuation of either 4.75 per cent — which represents the historic average trading premium of the voting shares over the non-voting shares — or a minimum premium of eight per cent.

Mason owns about 19 per cent of Telus’s voting stock, making it the largest voting shareholder.

However, Mason sold short almost the same amount in non-voting shares, essentially betting the price of those shares would fall if the share consolidation plan was defeated.

Short sellers make a profit when the stock price falls.

It is a legal trading strategy in Canada based on the traditional gap in prices between the voting and less desirable non-voting shares. Telus has complained that Mason Capital was voting $1.9 billion worth of Telus’s common shares with only a $25 million net economic stake in the company, calling it “empty voting.”

Telecom analyst Troy Crandall said one class of shares simplifies the situation and lets Telus’s management get on with running the company without the distraction.

As for Mason, Crandall said he doesn’t believe the hedge fund will immediately sell its stake in Telus, which would mean a loss.

“I don’t expect tomorrow that you’re going to see them sell a 19 or 20 per cent position in Telus,” said Crandall of MacDougall, MacDougall & MacTier in Montreal.

“When you have a very large position you cannot move out of things very fast, generally. It seems like something they will have to slowly and carefully move out of,” Crandall said.

“Given the way that they structured their trade, they need to have a spread and if they don’t get the spread they are essentially in a money-losing position,” he said of Mason.

Telus has said a vote in favour of its proposal to exchange non-voting shares for common shares on a one-to-one basis can be seen as a vote against Mason’s resolution for a premium for voting shareholders.

Similarly, a vote against Telus’ share exchange proposal was a vote in favour of the Mason Capital resolutions.

Telus first introduced its share-conversion plan in February, but withdrew the proposal right before its annual general meeting in May when it said that Mason’s “empty voting” tactics would prevent the proposal from passing.

Ratification of the share exchange proposal is scheduled for final court approval in early November.

Shares in Telus closed at $62.89, up two cents, on the Toronto Stock Exchange. Non-voting Class A shares closed at $63.72, up 52 cents, on the New York Stock Exchange.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Erika Fetterly, owner of EFP Studios, recently launched the Let Them Have A Voice campaign. (Contributed photo)
Central Alberta photographer’s campaign aims to give youths a voice

An Innisfail photographer is giving a platform to young central Albertans so… Continue reading

Chopped Canada-winning chef Pete Sok is trying to focus on the future as he reopens Boulevard Restaurant and Lounge in the Holiday Inn on Gasoline Alley during the pandemic. (Contributed photo)
Red Deer’s celebrity chef looks past the pandemic with new restaurant opportunity

Pete Sok is reopening Boulevard Restaurant — and betting on the future

The Red Deer Rebels hosted the Medicine Hat Tigers in the first game of the shortened 2020-21 season on Friday. The two teams faced off again in Medicine Hat Saturday (Photo by Rob Wallator/ Red Deer Rebels)
Red Deer Rebels fall to Medicine Hat Tigers on Saturday

Tigers 7 Rebels 2 The Red Deer Rebels have lost two straight… Continue reading

Alberta has 1,910 active cases of COVID-19 as of Wednesday. Red Deer is reporting five active cases, with 108 recovered. (File photo)
Red Deer reports 25th COVID-19 death

415 new cases identified provincially Saturday

Red Deer science-communicating dogs Bunsen and Beaker helped save a missing pet recently. The two dogs have more than 80,000 followers on Twitter. (Contributed photo)
WATCH: Red Deer science dogs help save lost pet

Red Deer science-communicating dogs Bunsen and Beaker helped rescue a missing pet… Continue reading

Alberta Premier Jason Kenney speaks during a news conference in Edmonton on Feb. 24, 2020. It’s budget day in the province, and Kenney’s United Conservative government is promising more help in the fight against COVID, but more red ink on the bottom line. THE CANADIAN PRESS/Jason Franson
Alberta Premier slams vandalism after slur painted on MLA’s office window

EDMONTON — Alberta Premier Jason Kenney is condemning alleged vandalism at the… Continue reading

Canada Pension Plan Investment Board President and Chief Executive Officer Mark Machin waits to appear at the Standing Committee on Finance on Parliament Hill, in Ottawa on Tuesday, November 1, 2016. Executives who engage in so-called "vaccine tourism" show both an ethical disregard for those less fortunate and a surprising lack of business acumen, experts argue. THE CANADIAN PRESS/Adrian Wyld
Vaccine tourism is both unethical and bad for business, experts say

Executives who engage in so-called “vaccine tourism” show both an ethical disregard… Continue reading

Edmonton Oilers' Jesse Puljujarvi (13) and Toronto Maple Leafs' Justin Holl (3) battle in front as goalie Jack Campbell (36) makes the save during second period NHL action in Edmonton on Saturday, February 27, 2021.THE CANADIAN PRESS/Jason Franson
No Matthews, no problem: Minus NHL goal leader, Maple Leafs blank Oilers 4-0

Leafs 4 Oilers 0 EDMONTON — The Maple Leafs knew even with… Continue reading

Leader of the Government in the House of Commons Pablo Rodriguez rises during Question Period in the House of Commons on Parliament Hill in Ottawa, Friday, Nov. 20, 2020. THE CANADIAN PRESS/Justin Tang
Gummed-up bills in House of Commons: harbinger of a federal election?

OTTAWA — All federal party leaders maintain they don’t want an election… Continue reading

The Pornhub website is shown on a computer screen in Toronto on Wednesday, Dec. 16, 2020. THE CANADIAN PRESS
Pornhub policies reveal legal gaps and lack of enforcement around exploitive videos

OTTAWA — Serena Fleites was in seventh grade when a sexually explicit… Continue reading

Sean Hoskin stands on a neighbourhood street in Halifax on Thursday, Feb. 25, 2021. Hoskin was diagnosed with COVID-19 almost a year ago with symptoms that still persist. Some provinces have established programs to deal with long-term sufferers but Atlantic Canada, with relatively low numbers of patients, has yet to provide a resource to assist them. THE CANADIAN PRESS/Andrew Vaughan
On East Coast, exhausted COVID-19 ‘long haulers’ hope specialized clinics will emerge

HALIFAX — On evenings when Sean Hoskin collapses into bed, heart pounding… Continue reading

Ottawa Senators goaltender Matt Murray (30) stands in his crease as Calgary Flames left wing Andrew Mangiapane (88), left to right, defenceman Rasmus Andersson (4), Matthew Tkachuk (19), Mikael Backlund (11) and Mark Giordano (5) celebrate a goal during second period NHL action in Ottawa on Saturday, Feb. 27, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Calgary Flames beat Ottawa 6-3 to end Senators’ three-game win streak

Flames 6 Senators 3 OTTAWA — The Calgary Flames used a balanced… Continue reading

Crosses are displayed in memory of the elderly who died from COVID-19 at the Camilla Care Community facility during the COVID-19 pandemic in Mississauga, Ont., on November 19, 2020. The number of people who would have died from a COVID-19 infection is likely to be much higher than recorded because of death certificates don't always list the virus as the cause of a fatality, experts say. THE CANADIAN PRESS/Nathan Denette
Death certificates don’t accurately reflect the toll of the pandemic, experts say

The number of people who would have died from a COVID-19 infection… Continue reading

Most Read