Court declares the exchange fair and reasonable and rejects Mason Capital's appeals
Dec. 18, 2012
/CNW/ - The Supreme Court of
today approved TELUS' proposal to exchange its non-voting shares for common shares on a one-for one basis. In a 125 page written decision, the court concluded that the exchange was fair and reasonable and rejected
hedge fund Mason Capital's arguments and appeals made in opposing the proposal.
The court decision stated: "The Arrangement has arisen through a robust process that has been independently and favourably reviewed. The benefits to be achieved by the Arrangement are real and substantial." It continues, "All evidence on this application points to the conclusion that the Arrangement which has been proposed to the Non-Voting Shareholders is fair and reasonable…importantly, the shareholders, including the Common Shareholders who have a real economic interest in TELUS, overwhelmingly support the Arrangement." The judge went on to state that "…Mason's arguments display a lack of regard for the overall circumstances relating to TELUS and its shareholders, which are to be considered by this Court in the context of this fairness hearing. As I have earlier stated, Mason can hardly be considered a spokesman for the Common Shareholders when its strategy will result in a loss of value to the other Common Shareholders…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…"
"This decision is positive for TELUS shareholders and supports the overwhelming approval expressed by them at our
shareholder meeting," said
, TELUS President and CEO. "This decision confirms our proposal is fair and beneficial to all shareholders, is widely supported by shareholders with a true economic stake in our company and is consistent with the principles of good corporate governance. 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. I would like to thank all of our committed shareholders for their support in this process."
Mr. Entwistle added "the decision furthers TELUS' strategy of enhancing shareholder value, as it will increase liquidity and marketability of all TELUS shares. Since TELUS originally announced the proposal on
, the value of both share classes have been far stronger than the stock market index and TELUS' peers, in part reflecting strong support from holders of both TELUS non-voting and common shares. As of
, TELUS' non-voting share price was up 20 per cent since the original announcement was made in February of 2012, while the common share price was up 16 per cent - about
in new shareholder value. During the same period the TSX has declined two per cent.
"At the core of enhancing shareholder value over many years have been our excellent financial and operational results which are driving the ability for us to deliver on our dividend growth model. We have delivered globally-leading shareholder returns amongst all of our peers retrospectively, and we believe we have the strategy and team to continue to do it prospectively," Mr. Entwistle said. "Today's positive court decision augments our momentum in this regard."