A U.S. hedge fund has escalated its battle with Telus Corp by asking a court to force the Canadian telecom to reveal h o w a lot of support shareholders had given to the company’s failed commit to unify its 2 categories of stock.
Mason Capital Management LLC , its largest shareholder, said it may base a call on whether or not to extend or decrease its nearly twenty p.c stake within the Vancouver-based company on knowing what quantity support the set up drew when shareholders voted in could.
The plan, that Telus withdrew when it became clear that Mason would block it, would have given a non-voting category of shares identical standing because the a lot of valuable voting shares.
As a short-seller of the non-voting stock, Mason probably created cash by blocking the deal, that knocked the category lower. The hedge fund c ould look to profit once more if Telus revives the live because it says it’s going to do.
While it had been not immediately clear what Mason’s end-game was, its c ontinued p resence on the shareholder list may stymie Telus’ efforts to re introduce the set up.
Mason has employed Blackstone cluster LP to hunt out a buyer for the stake, a supply told Reuters in June.
In the petition to the Supreme Court of British Columbia d ated could ten, Mason’s lawyers asked for unredacted copies of the proxies submitted by holders of the voting stock.
Mason said Telus had provided copies however data associated with the proposal had been obscured, creating it not possible to work out how investors had voted.
Mason had bought nineteen p.c of Telus’ voting shares earlier than the planned vote. The fund had borrowed a far larger range of non-voting shares and sure benefited as their price fell when Telus withdrew the vote.
At the time, Telus said that excluding Mason’s opposing vote, the proposal would are approved by each categories of shareholders with a complete of ninety two.4 p.c in favor.
The filing showed that Mason has since slightly added to its position, that is currently at nearly twenty p.c. It failed to say what percentage borrowed non-voting shares it still held.
“EMPTY VOTING STRATEGY”
Telus said it opposed the filing.
“This is simply another tactic by Mason to undertake to advance their empty voting strategy within the interests of their own short-term profits at the expense of our alternative shareholders,” spokesman Shawn Hall said in an exceedingly statement.
Telus place its dual-share structure in place to adjust to a law limiting foreign management of Canadian telecom firms at a time when U.S.-based Verizon Communications Inc was a serious investor.
The law limits foreign direct possession in an exceedingly major carrier to twenty p.c. It additionally bars foreigners from owning quite a one-third interest within the carrier’s parent company.
The Canadian government recently passed legislation that allows a far off buyer to regulate a telecom company with but a ten p.c market share, a amendment that doesn’t apply to Telus.
If Telus is shown to own breached the foreign possession limits it may endanger its bids on valuable wireless spectrum in an auction due next year, Laurentian Bank Securities‘ Ron Mayers told BNN tv.