Canadian incumbent Telus has won its long-running battle with hedge fund Mason Capital after Telus shareholders approved the collapse of its dual-class share structure.
At an EGM held yesterday, Telus’ proposal received 81% support for the share…
Canadian incumbent Telus has won its long-running battle with hedge fund Mason Capital after Telus shareholders approved the collapse of its dual-class share structure.
At an EGM held yesterday, Telus’ proposal received 81% support for the share conversion plan.
Telus had both voting and non-voting shares but announced intentions to scrap that system earlier this year, converting non-voting stock into common shares in a 1:1 conversion.
In spite of Mason’s attempts to lobby other stockholders and obstruct the proceedings, the share conversion, which had been recommended by proxy firms Glass Lewis and ISS, received overwhelming approval from shareholders. 99.5% of the non-voting shares voted in favour, and 62.9% of the voting shares.
Mason disagreed with the plan, saying it would dilute the value of its voting shares. A 1:1 conversion rate did not reflect the “superior value” of the existing common shares, which have historically traded 4%-5% higher than non-voting shares, Mason had repeatedly argued. It succeeded in blocking a first attempt to vote on the plan in May.
Telus said that none of Mason’s four resolutions received the requisite support from common shareholders required to pass.
“The result realised exemplifies the principles of good corporate governance and the fairness of shareholder democracy in Canada,” said Telus CEO Darren Entwistle.
Telus has argued that the conversion will enhance trading liquidity and increase shareholder democracy.
The last step in the process of the conversion will take place on 5 November when the exchange proposal will be put in front of the Supreme Court of British Columbia for approval.
Mason is already laying the legal groundwork for a final appeal, The Globe and Mail reported.
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