An independent proxy adviser is siding with Telus (TSX:T) in its ongoing battle with a New York hedge fund over plans to convert non-voting shares to voting shares.
Telus is planning to hold a shareholder meeting on October 17, when shareholders are being asked to eliminate the company's dual class shares – a move that has been contested by Mason Capital, a major Telus shareholder.
Telus had to cancel an earlier scheduled vote, when it became apparent that Mason's campaign to have shareholders reject the conversion might work.
Mason lost the latest round in its ongoing fight with Telus, when the BC Supreme Court ruled that it could not hold its own Telus shareholder meeting.
That cleared the way for Telus to move ahead with its plans to hold a vote on the share conversion on October 17.
Telus is now pointing to the opinion of Institutional Shareholder Services Inc. (ISS), an independent proxy adviser, which is recommending that Telus shareholders support the conversion – a move Mason has argued would unnecessarily enrich the owners of non-voting shares.
ISS has stated that "the proposed transaction continues to align voting rights with economic interest, offers shareholders meaningful economic opportunity through increased trading liquidity and a dual listing on the NYSE, and has been ratified by a strong market response."
Telus CEO Darren Entwistle said, "This recommendation from a trusted neutral expert on corporate governance and proxy voting confirms that Telus' proposal is fair and beneficial to all shareholders and is consistent with the principles of good corporate governance and shareholder democracy.
"We ask all of our shareholders to support our proposal, casting their votes for good governance and the value-creating benefits fostered by collapsing our share structure into one class of shares."
Mason owns about 19% of Telus' stock – at least on paper. According to Telus, Mason's latest disclosure at the end of August shows the hedge funds holds only a 0.02% stake, once its short position is subtracted from the shares the company owns.
Mason shorted 14.7 million common shares and 18 million non-voting shares, while owning 32.8 million common shares, Telus said.
