Canadian incumbent Telus’ long-running proposal to collapse its dual-class share structure has cleared its last hurdle following supreme court approval of the stock conversion.
New York hedge fund Mason Capital had fiercely opposed the exchange,…
Canadian incumbent Telus’ long-running proposal to collapse its dual-class share structure has cleared its last hurdle following supreme court approval of the stock conversion.
New York hedge fund Mason Capital had fiercely opposed the exchange, arguing that the 1:1 conversion ratio did not reflect the “superior value” of the existing common shares, which have historically traded 4%-5% higher than the non-voting shares.
But the court described the proposal as “fair and reasonable” and showed little sympathy for Mason.
“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,” the judge said.
According to Telus, Mason has been selling off its shares in the operator in recent weeks as it looks to cut its losses.
Telus CEO Darren Entwistle said he expects the conversion to be ratified soon: “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.”
Telus must wait at least five business days before it proceeds with the share conversion.
Telus said that if Mason does not file an appeal and obtain a further stay during that period, it will proceed to complete the share exchange process, including setting an effective time for the share exchange. It will then likely take an additional two weeks to complete the listing and delisting of shares on the stock exchanges.
Telus announced its intention to collapse its dual-class share structure in February this year but its first attempt failed in May after Mason effectively blocked it.
