* Hedge fund has been blocking share conversion plan
* Telus says foreign ownership level spiked, fell back
Dec 17 Canada's Telus Corp said on Monday
it believes U.S. hedge fund Mason Capital Management LLC
borrowed or "otherwise acquired" the telecom company's shares at
the end of November to avoid disclosing a big reduction in its
Telus said the percentage of its shares in foreign hands had
dropped to about 15 percent, after applications to buy shares
pushed potential foreign ownership above 30 percent in late
November. It said it saw a similar pattern at the end of
Telus did not say why it believes Mason was behind the
changing foreign ownership levels. But according to previous
disclosures, Mason owned about 19 percent of voting shares in
August, much more than other non-Canadian investor.
Canadian law prohibits foreign ownership of more than 33.3
percent in any large telecom player.
Mason and Telus have been trading press releases for months,
as Mason seeks to block a scheme to consolidate Telus' two
classes of stock on a one-for-one basis. Mason took simultaneous
long and short positions in the company's voting and non-voting
shares, and stood to benefit if the consolidation failed.
Vancouver-based Telus said in November that it believed
Mason was selling down its position.
Mason could not immediately be reached for a comment.
The fund has said Telus' voting shareholders should be
rewarded as the two classes merge, in part because they paid
more for their stock in the first place. Telus said universal
voting rights improve corporate governance.
Telus investors backed the share conversion plan in October,
but British Columbia's Supreme Court is still considering an
appeal by Mason.