VANCOUVER, Aug. 31, 2012 /CNW/ - TELUS will launch legal proceedings seeking a court order that New York hedge fund Mason Capital's attempt to hold a shareholder meeting is invalid. On August 21 TELUS called a court-approved shareholder meeting for October 17, where all shareholders will get a democratic vote on TELUS' share exchange proposal. Earlier today Mason announced that CDS had called another meeting for the same day.
"Mason Capital's announcement of a second meeting the same day is an absurd tactic designed to confuse shareholders in the hope of widening the spread between the trading price of the company's common and non-voting shares so that Mason can profit from their empty voting trading strategy," said Robert McFarlane, TELUS CFO and Executive Vice-President.
"We believe that Mason's meeting and resolutions are undemocratic and invalid under Canadian law," added Mr. McFarlane. "Mason is proposing to remove key rights held by TELUS' non-voting shareholders without giving them an approval right. More than that, Mason's resolutions would take away key benefits for all shareholders that would result from approval of TELUS' proposal to collapse its dual-share classes. TELUS shares would enjoy enhanced trading volumes, liquidity and marketability and TELUS common shares would be listed on the New York Stock Exchange for the first time. Mason's attempt to hold a separate shareholder meeting is contrary to corporate law, good governance and shareholder democracy and therefore we intend to halt this inappropriate move."
TELUS has invited shareholders to put forward appropriate resolutions for a shareholder vote at TELUS' October 17 shareholder meeting.Background On August 21, TELUS announced a new proposal to exchange its non-voting shares into common shares on a one-for-one basis to a democratic vote of all its shareholders. The announcement followed interim approval for the vote from the BC Supreme Court. Under TELUS' proposal, holders of both TELUS non-voting and common shares are invited to vote on the proposal at a meeting of shareholders planned for October 17, 2012 or online via the proxy voting system once the information circular is distributed in advance of the meeting. Shareholders on record as of September 4 will be entitled to vote at the meeting. TELUS' proposal will require approval from its non-voting and common shareholders, each voting separately as a class. In accordance with applicable corporate laws, the TELUS proposal will require approval from two-thirds of its non-voting share votes cast at the meeting, as the non-voting shares are being exchanged for common shares. As common shares will not see their legal rights change, TELUS is seeking approval by a simple majority of common share votes cast at the meeting. Once approved, TELUS non-voting shares would be exchanged for common shares on a one-for-one basis, making common shares TELUS' sole class of issued and outstanding equity securities. TELUS currently has approximately 175 million common shares and 151 million non-voting shares issued and outstanding, so this would result in the enhanced liquidity and marketability of a single class of approximately 326 million common shares. Upon approval, common shares will be listed on the New York Stock Exchange (NYSE) for the first time.