Telus Corp. (TSX:T) has withdrawn its proposal to convert non-voting shares into voting shares in a play for added liquidity, lambasting “the empty voting tactics” of hedge fund Mason Capital Management LLC.
Mason Capital has publicly campaigned against the conversion, which it has claimed is a “gift” to non-voting shareholders.
Telus, on the other hand, has alleged that Mason has landed more votes than its economic stake warrants by buying up voting shares while short-selling non-voting shares. The British Columbia Securities Commission last week denied Telus’ request that the regulator require Mason to disclose its position with respect to voting and non-voting shares.
In this morning’s announcement, Telus said that the conversion proposal would fail in a vote despite “overwhelming 92.4% shareholder support excluding Mason Capital’s empty voting.”
Telus alleges that Mason Capital was voting with $1.9 billion worth of Telus common shares, despite only a $25 million net economic stake.
“Our discussions with shareholders over the past few weeks and the 92.4% of the votes they have case in favour make it clear they are strongly supportive of Telus’ proposal and that it would have been overwhelmingly accepted if not for the interference of Mason Capital,” said Telus president and CEO Darren Entwistle.
“In the face of Mason’s massive empty voting and the resulting inequity inflicted upon Telus’ other shareholders, our best option at this juncture is to withdraw this proposal and reintroduce a new proposal in due course.”
As of press time, Telus stock was virtually unchanged, down just 0.1% to $58.10.
