Canadian incumbent Telus is facing a potential legal battle with activist investor Mason Capital after the US hedge fund filed a petition against the telco, according to The Globe and Mail.
Mason, which is looking to sell its 20% stake in Telus, is…
Canadian incumbent Telus is facing a potential legal battle with activist investor Mason Capital after the US hedge fund filed a petition against the telco, according to The Globe and Mail.
Mason, which is looking to sell its 20% stake in Telus, is attempting to compel the telco to disclose voting ballots so it can gauge the level of shareholder support for Telus’ proposal to dissolve its dual-class share structure.
The plan, withdrawn by Telus after Mason’s objections, would have seen its cheaper non-voting stock acquire the same status as the more expensive voting stock. Mason owns a substantial amount of the voting stock which would have been temporarily devalued by the move.
At the end of June, Mason suggested that shareholder proxy data could reveal whether Telus was in breach of Canada’s strict foreign investment laws. The legislation dictates that at least 66.6% of Telus’ voting shares have to be owned by Canadian citizens.
Alternative operator Globalive, trading under the Wind brand, has also suggested that Telus is in breach of foreign ownership rules.
Mason has reportedly said that so far it has only seen heavily redacted versions of the voting proxies that do not reveal how shareholders voted. It claims in its court filing that it has the right to know shareholder voting intentions so it can decide whether to increase or decrease its stake.
Mason hired Blackstone to sell its stake in May, with reports suggesting it could fetch around C$2bn.
According to The Globe and Mail, Telus vociferously denies Mason’s allegations and plans to oppose the filing.
In previous statements to TelecomFinance regarding Mason, Telus had accused activist investor Mason only to be interested in short term profit at the expense of other shareholders. It has accused the hedge fund of using an “empty voting” strategy, which inflated its influence when key decisions are voted on, and dismissed allegations related to its foreign ownership levels.
Telus has always maintained it is fully compliant with foreign ownership restrictions and remains keen to dissolve its dual-class share structure.
