Telus said Monday that it has been given permission to go ahead with a vote on its share exchange proposal by the Supreme Court of British Columbia, despite an appeals court ruling that sided with a dissident shareholder.
The Vancouver-based telecom company said it will push ahead with its shareholder vote -which is slated for Wednesday, but may be postponed - to end its dual-class share structure after the court reaffirmed the validity of its plan.
The assurance comes after hedge fund Mason Capital Management was given the go-ahead by the B.C.
Court of Appeal Friday to hold its rival meeting of voting shareholders of Telus to consider a premium for the share conversion plan. It's not known when that meeting will be held.
Telus wants to convert its dual-class share structure, which separates shares that have voting rights and non-voting A shares.
Mason has repeatedly said holders of Telus's voting shares should get a premium to approve it, which Telus has said its governing rules don't require it to do.
"We are pleased that the Supreme Court of B.C. has once again provided their support for our share exchange proposal to proceed, rejecting the latest legal manoeuvre from Mason Capital whose net economic ownership position in our company is a mere 0.02 per cent," chief executive Darren Entwistle said in a statement.
New York-based Mason Capital owns about 19 per cent of Telus's voting stock, making it the largest voting shareholder. However, Mason shorted almost the same amount in non-voting shares, essentially betting the price of those shares would fall if the share consolidation plan was defeated.
Short sellers make a profit when the stock price falls. It is a legal trading strategy in Canada based on the traditional gap in prices between the voting and less desirable nonvoting shares. Telus has complained Mason Capital was voting on $1.9 billion worth of Telus's common shares with only a $25 million net economic stake in the company.
Telus's share conversion proposal requires approval of two-thirds of the company's non-voting share owners and a majority of common shareholder votes.
