Mason Capital, the hedge fund that has accumulated nearly 19% of shares in Canadian telco Telus, has published details about its opposition to plans to merge Telus voting and non-voting shares.
Mason’s rejection of the plan, which requires approval by…
Mason Capital, the hedge fund that has accumulated nearly 19% of shares in Canadian telco Telus, has published details about its opposition to plans to merge Telus voting and non-voting shares.
Mason’s rejection of the plan, which requires approval by two thirds of holders of Telus common shares and non-voting shares, was revealed earlier in April in a regulatory filing.
Telus wants to convert all non-voting shares into voting common shares on a one-to-one basis, although the voting shares have historically traded at a premium around 4% to 5% over non-voting shares.
In a public statement Mason Capital now accused the Telus board that it “has not properly considered the interests of the holders of voting shares,” arguing that a 1:1 conversion ration does not reflect the “superior value” of the voting shares. Furthermore, the new structure would reduce the permitted level of foreign ownership because, under Canadian investment rules, no more than 33% of voting shares can be held by non-Canadians, but no such restriction applies to non-voting shares.
Mason called on Telus to rework the proposal and to offer “an appropriate premium for the voting shares”. Mason said it intends to vote against the current proposal if no adjustments are being made.
Telus did not immediately reply to requests for comment.
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