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Mason seeks premium if Telus revives stock plan
TORONTO Aug 2 (Reuters) - A U.S. hedge fund stepped up its battle with Telus Corp on Thursday, calling for a meeting of holders of the company's voting shares to prevent it from revisiting a failed plan to consolidate its two classes of stock on a one-for-one basis.
Mason Capital Management LLC, the largest shareholder of the Vancouver-based company, earlier this year derailed a plan to give the Canadian telecom provider's non-voting shares the same status as its more valuable voting shares.
The fund is now calling on holders of Telus' voting shares to amend the company's by-laws and establish a minimum premium valuation for the voting shares. That would block Telus from reviving the one-for-one proposal.
"A one-for-one proposal unfairly takes value away from voting shareholders who have paid for it and gives it to non-voting shareholders for free," said Mason's Co-Founder Michael Martino in a statement on Thursday.
Mason claims that Telus' board and its senior management - whose personal economic interests in Telus are heavily weighted to the non-voting shares - stand to benefit from such a deal. The plan was withdrawn by Telus in May when it became clear that the one-for-one proposal would not win sufficient support.
Mason proposes a premium valuation of either 4.75 percent, which represents the historic average trading premium of voting shares over the non-voting shares, or an enhanced premium of 8 percent, which is based on a valuation study prepared by Mason's financial adviser, Blackstone Advisory Partners.
Telus said it would take Mason's request for a shareholder meeting under consideration.
"This is just another nuisance play by Mason Capital," said Telus spokesman Shawn Hall. "We remain committed to our one-for-one proposal."
Mason said securities laws in British Columbia, where Telus is incorporated, require the company to hold the requisitioned meeting within four months from Thursday.
If Telus does not send notice of the meeting to shareholders within 21 days from Thursday, Mason said it has the right to send the notice itself.
Telus is set to issue its second-quarter earnings release on Friday.
Telus' voting shares closed 32 Canadian cents lower at C$63.39 on Thursday on the Toronto Stock Exchange.
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