One for one conversion ratio of Non-Voting Shares to Common Shares
TELUS also announces dividend increase of five per cent to 61 cents per
VANCOUVER, Feb. 21, 2012 /CNW/ - TELUS Corporation (TSX: T, T.A; NYSE:
TU) today announced that it is proposing to convert its Non-Voting
Shares into Voting Shares. Through this proposal, TELUS will give
shareholders the opportunity to decide whether to eliminate the
Corporation's dual class share structure at TELUS' upcoming annual and
special meeting of shareholders to be held on May 9, 2012. Under the
terms of TELUS' proposal, each Non-Voting Share would be converted into
a Common Share on a one for one basis if approved by two-thirds of the
votes cast by the holders of Common Shares and two-thirds of the votes
cast by the holders of Non-Voting Shares, each voting separately as a
Darren Entwistle, President and CEO, said: "This proposed share
conversion is responsive to shareholder feedback, resulting in enhanced
trading liquidity and the extension of voting rights to all TELUS
shareholders. Notwithstanding the fact that both classes of shares are
entitled to the same dividend, are widely held and have similar
liquidity, our Non-Voting Shares have historically traded at a discount
to our Common Shares. The approval of this proposal will eliminate this
price discount. TELUS believes the proposed simplification of our share
structure to a single class is beneficial and fair to all shareholders,
and consistent with good corporate governance."
Mr. Entwistle added: "Consistent with our commitment to target two
dividend increases per year to 2013 in the range of circa 10 per cent
annually, TELUS is pleased to announce an increase in the quarterly
dividend by three cents to sixty-one cents, which will be payable on
July 3, 2012. This is 11 per cent higher than the dividend a year
earlier and is the fifth dividend increase in the past 19 months. This
reflects our continued confidence in our prospects for earnings and
cash flow growth in 2012 and beyond."
Brian Canfield, Chair of the Board of Directors, stated: "The Board has
concluded that it is appropriate that our shareholders have the
opportunity to consider moving to a capital structure in which all of
our equity securities have equal voting rights. We also believe that we
will retain the ability to ensure that we remain compliant with foreign
ownership restrictions without the use of a Non-Voting Share Class. In
keeping with TELUS' commitment to corporate governance leadership, our
Board determined that shareholders should have the opportunity at this
time to decide whether to eliminate our dual class share structure."
The elimination of TELUS' Non-Voting Share Class would be completed by
way of a court-approved plan of arrangement (the "Arrangement") and
will be subject to the approval of two-thirds of the votes cast by the
holders of Common Shares and two-thirds of the votes cast by the
holders of Non-Voting Shares, each voting separately as a class.
Following all approvals, the Common Shares would be TELUS' sole class
of equity securities and TELUS would have approximately 325 million
issued and outstanding Common Shares.
TELUS' dual class share structure was designed more than a decade ago to
deal with federal telecommunications legislation which restricts
foreign ownership (33.3 per cent or less at parent company) at a time
when TELUS' shareholder base included a significant non-Canadian
shareholder. TELUS' shareholder base has evolved significantly since
then and it no longer has a major non-Canadian shareholder, its shares
are widely held and it is estimated that less than 20 per cent of TELUS
shares are currently held by non-Canadians. If the proposal is
approved, the Common Shares will be dual-listed on the Toronto and New
York stock exchanges for the first time.
In order to consider the implications of eliminating the dual class
share structure and the most appropriate way to implement such a
change, the Board of Directors established a Special Committee
comprising Brian A. Canfield (who serves as Chair of the Committee), A.
Charles Baillie, R. John Butler, R.E.T. (Rusty) Goepel, John S. Lacey
and William (Bill) MacKinnon.
The Special Committee reviewed various considerations related to a share
consolidation and unanimously concluded that such a change was
desirable and that shareholders should have the opportunity to decide
whether to eliminate the dual class share structure. The Special
Committee retained Scotiabank as an independent financial advisor to
assist it in evaluating the proposed change. In this regard, the
Special Committee received an opinion from Scotiabank that a one for
one conversion ratio is fair, from a financial point of view, to
holders of Non-Voting Shares and to the holders of Common Shares (the
After considering the recommendation of the Special Committee and the
Fairness Opinion, the Board of Directors unanimously concluded that the
Arrangement is in the best interests of TELUS and is reasonable and
fair in the circumstances. Accordingly, it is recommending that
shareholders approve moving to a single class of voting equity
The required information for shareholders to consider this proposal and
to vote on the special resolution to approve the Arrangement will be
contained in the 2012 information circular to be mailed or distributed
electronically to Common and Non-Voting shareholders on or before April
18, 2012. This information circular will also be available at that time
on the Company's website at telus.com/agm.
In addition to shareholder and court approvals for the transaction, the
listing of the new Common Shares to be issued pursuant to the
Arrangement is subject to approvals from the Toronto Stock Exchange
("TSX") and the New York Stock Exchange ("NYSE"). Provided those
approvals are obtained, TELUS' Common Shares would then trade on both
the TSX and the NYSE.
Legal advice in respect of the proposed transaction is being provided by
Osler, Hoskin & Harcourt LLP; Farris, Vaughan, Wills & Murphy LLP; and
Skadden, Arps, Slate, Meagher & Flom LLP.
Dividend Declaration - increase to 61 cents per quarter
The Board of Directors has declared a quarterly dividend of sixty-one
cents ($0.61) Canadian per share on the issued and outstanding Common
Shares and sixty-one cents ($0.61) Canadian per share on the issued and
outstanding Non-Voting Shares of the Company payable on July 3, 2012 to
holders of record at the close of business on June 8, 2012.
In the event that the proposed share conversion on Non-Voting Shares to
Common Shares on a one-for-one basis receives all requisite approvals
and is effective prior to the dividend record date of June 8, 2012,
holders of record on such date who previously held Non-Voting Shares
would hold Common Shares and would receive the same dividend as all
other holders of Common Shares.
This new quarterly dividend represents the second increase this year.
The dividend is a three cent or 5.2 per cent increase from the $0.58
quarterly dividends paid on January 3 and to be paid on April 2, 2012
and a 10.9 per cent increase from the $0.55 quarterly dividend paid in
July 2011. This is consistent with TELUS' dividend growth model.
This news release contains statements about expected future events of
TELUS that are forward-looking. By their nature, forward-looking
statements require the Company to make assumptions and predictions and
are subject to inherent risks and uncertainties. There is significant
risk that the forward-looking statements will not prove to be accurate.
Readers are cautioned not to place undue reliance on forward-looking
statements as a number of factors could cause actual future events to
differ materially from that expressed in the forward-looking
statements. Except as required by law, TELUS disclaims any intention or obligation
to update or revise forward-looking statements.
TELUS (TSX: T, T.A; NYSE: TU) is a leading national telecommunications
company in Canada, with $10.4 billion of annual revenue and
12.7 million customer connections including 7.3 million wireless
subscribers, 3.6 million wireline network access lines and 1.3 million
Internet subscribers and more than 500,000 TELUS TV customers. Led
since 2000 by President and CEO, Darren Entwistle, TELUS provides a
wide range of communications products and services including wireless,
data, Internet protocol (IP), voice, television, entertainment and
In support of our philosophy to give where we live, TELUS, our team
members and retirees have contributed more than $250 million to
charitable and not-for-profit organizations and volunteered 4.2 million
hours of service to local communities since 2000. Eleven TELUS
Community Boards across Canada lead TELUS' local philanthropic
initiatives. TELUS was honoured to be named the most outstanding
philanthropic corporation globally for 2010 by the Association of
Fundraising Professionals, becoming the first Canadian company to
receive this prestigious international recognition.
For more information about TELUS, please visit telus.com.
SOURCE TELUS Corporation
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