* Share consolidation to start in early February
* Telus common shares will trade on NYSE
By Allison Martell
Jan 25 Canadian telecommunications company Telus
Corp said on Friday it had settled a dispute with U.S.
hedge fund Mason Capital Management LLC, and will go ahead with
a share consolidation plan in February.
Mason, until recently Telus' biggest shareholder, had tried
to block the plan to consolidate voting and non-voting shares on
a one-for-one basis.
Telus said the two sides agreed to end their legal battle,
adding that their agreement "does not involve the payment of
funds to either party."
The consolidation means Telus' voting shares will trade on
the New York Stock Exchange for the first time. Right now, only
non-voting shares trade in New York.
In November, Telus said it believed Mason was selling down
its positions, which the fund built up after Telus first floated
the consolidation plan last February.
Mason took simultaneous long and short positions in Telus
voting and non-voting shares, and thus stood to benefit if the
spread between the two classes widened, according to court
documents from December.
Mason argued that 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, and have prevailed in key court rulings.
As of Dec. 31, Mason held 3.4 percent of Telus' common
shares, down from 19 percent earlier in the year, according to
Thomson Reuters data.
On Friday, Telus said its shares will be delisted in New
York on or about Feb. 5, and in Toronto around Feb. 8. The
single class of shares will begin trading in New York around
Feb. 5, and in Toronto on or about Feb. 11.
Telus' dual-class structure was introduced to comply with
restrictions on foreign investment in telecommunications
companies after a 1998 merger with BC Telecom saddled Telus with
a major U.S. shareholder, GTE, now Verizon Communications Inc
. Verizon has since sold its stake.
The spread between the two share classes, already small,
narrowed further in early trading on the Toronto Stock Exchange.
Voting shares fell 0.2 percent to C$65.62, and
non-voting shares rose 0.1 percent to C$65.55. In New
York, non-voting shares fell 0.6 percent to $64.97.