UPDATE 2-Mason seeks to sell Telus stake, source says
* Telus's biggest shareholder shopping stake, source says
* Source says dissident shareholder Mason hired Blackstone
TORONTO, June 6 (Reuters) - Telus Corp's biggest shareholder, Mason Capital Management LLC, is looking for a buyer for its 19 percent stake in the Canadian telecommunications provider, a s ource familiar with the matter said on Wednesday.
The U.S.-based hedge fund has hired Blackstone Group LP to sell its $2 billion stake, said the source, who declined to be identified because the sale plans are not public.
Mason and Blackstone declined to comment.
Mason bought the voting shares in a successful bid last month to block the Vancouver-based company's plan to unify its dual-share structure by converting non-voting stock into voting shares on a one-for-one basis.
Mason had borrowed a much larger number of non-voting shares and likely benefitted after Telus withdrew the vote. That led to a drop in the price of the non-voting stock, and Mason could then buy shares cheaply to pay back those it had borrowed.
Since then, it has been unclear whether Mason intended to hold on to the stake or look to dispose of it.
A Telus spokesman said that regardless of what Mason chooses to do with its Telus stake, the company plans to try again "in due course" to put its conversion plan in place.
Telus put its dual-share structure in place to comply with laws limiting foreign control of Canadian telecom companies at a time when U.S.-based Verizon Communications Inc was a major investor. When initiated, the non-voting shares were offered on a one-to-one basis.
Telus's voting shares closed 0.5 percent lower at C$59.53 on the Toronto Stock Exchange, while the non-voting stock sl ipped 0.6 percent to C$57.97.
The historical price gap between the two classes of shares had narrowed after Telus said it planned to unify the shares, but has widened a bit since the move was blocked.
The Blackstone bankers have contacted as many as 30 groups worldwide, t he source said, including telecom companies that may look to build a stake in Telus ahead of a Canadian government move to liberalize restrictions on foreign ownership of the country's telecom providers.
The government is introducing legislation that would enable a foreign buyer to control a telecom company with less than 10 percent of the market, a change that does not affect existing foreign-ownership restrictions on Telus and its main rivals BCE Inc and Rogers Communications.
Foreigners are currently prohibited from owning more than 20 percent of the voting shares in those companies and limited to indirect control of 46.7 percent.
Industry executives are pushing for the foreign-ownership limits to be raised across the board, but Industry Minister Christian Paradis gave no indication on Tuesday that the government would take that step anytime soon.
The move to sell the stake was first reported by Canada's Globe and Mail newspaper.