Court decisively rejects Mason Capital's resolutions and attempt to call
a shareholder meeting
VANCOUVER, Sept. 11, 2012 /CNW/ - The Supreme Court of British Columbia
today decided that New York hedge fund Mason Capital cannot hold the
meeting of TELUS shareholders it had tried to call and that its
proposed resolutions are invalid.
The Court determined that the actions of Mason Capital were contrary to
law and that Mason's meeting and resolutions will not proceed.
Mason's attempts to disrupt TELUS' proposed exchange of non-voting
shares into common shares on a one-for-one basis clearly arise from its
desire to profit from its empty voting strategy at the expense of other
The Court made a number of comments about Mason Capital's empty voting
"When a party has a vote in a company but no economic interest in that
company, that party's interests may not lie in the wellbeing of the
company itself. The interests of such an empty voter and the other
shareholders are no longer aligned and the premise underlying the
shareholder vote is subverted."
The Court also said that only Mason stands to profit if the price spread
between common shares and non-voting shares increases, and that "only
Mason is indifferent to the overall value of TELUS itself."
According to Mason's latest disclosure, as of August 31 it has only a
70,900 net share ownership stake in TELUS, a 0.02 per cent position,
once its short position is subtracted from the shares they own. Mason
shorted 14.7 million common shares and 18.0 million non-voting shares,
while owning 32.8 million common shares.
TELUS will proceed with its meeting October 17 where all TELUS
shareholders will have a vote on the company's proposal to exchange its
non-voting shares into common shares on a one-for-one basis.
"We firmly believe this proposal is fair and beneficial to all
shareholders, is widely supported by shareholders with a true economic
stake in our company, and is consistent with the principles of good
corporate governance," said Darren Entwistle, TELUS President and CEO.
"Moreover, this effort is supporting material value creation for our
company and both classes of our shareholders."
TELUS has provided information for shareholders about our share exchange
proposal in an information circular that was recently distributed by
mail and electronically to common and non-voting shareholders. It is
posted online at telus.com/investors and telus.com/shareexchangeproposal.
On August 31, Mason Capital announced a second shareholder meeting for
only common shareholders on October 17. The Court today found that
Mason's requisition for a meeting and its resolutions were invalid and
that Mason cannot hold its meeting.
On August 21, TELUS announced a new proposal to exchange its non-voting
shares into common shares on a one-for-one basis to a democratic vote
of all its shareholders. The announcement followed interim approval for
the vote from the Supreme Court of British Columbia. This vote and a
meeting of shareholders will proceed on October 17.
Under TELUS' proposal, holders of both TELUS non-voting and common
shares are invited to vote on the proposal at a meeting of shareholders
on October 17, 2012 or online via the proxy voting system. Shareholders
on record as of September 4 will be entitled to vote at the meeting.
TELUS' proposal will require approval from its non-voting and common
shareholders, each voting separately as a class. In accordance with
applicable corporate laws, the TELUS proposal will require approval
from two-thirds of its non-voting share votes cast at the meeting, as
the non-voting shares are being exchanged for common shares. As common
shares will not see their legal rights change, TELUS is seeking
approval by a simple majority of common share votes cast at the
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 NYSE. Provided those approvals are obtained, TELUS'
common shares would then trade on both the TSX and the NYSE.
A special committee of TELUS' Board of Directors has considered the
implications of this share exchange. Scotia Capital served as the
independent financial advisor to assist this committee in evaluating
the proposal. After careful review, Scotia Capital provided an opinion
that a one-for-one exchange ratio is fair, from a financial point of
view, to holders of both common shares and non-voting shares,
After considering the recommendation of the special committee and Scotia
Capital, TELUS' Board of Directors unanimously concluded that the
Arrangement is in the best interests of TELUS and is reasonable and
fair to all shareholders. Accordingly, it is recommending that
shareholders approve the share exchange.
Forward looking statement:
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 can be no
assurance that the share exchange proposal will receive voting approval
and, if not approved, the market price of non-voting shares and/or
common shares may decline given that share prices in both classes
increased on the announcement of the February proposal. In addition,
there can be no assurance that the final court order in respect of the
Arrangement will be granted and that the associated benefits for TELUS
shareholders will be realized. 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 $10.6 billion of annual revenue and
12.8 million customer connections including 7.4 million wireless
subscribers, 3.5 million wireline network access lines, 1.3 million
Internet subscribers and 595,000 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 video.
In support of our philosophy to give where we live, TELUS, our team
members and retirees have contributed more than $260 million to
charitable and not-for-profit organizations and volunteered 4.2 million
hours of service to local communities since 2000. Fourteen TELUS
Community Boards 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
For more information about TELUS, please visit telus.com.
SOURCE: TELUS Corporation
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