Telus said the B.C. Supreme Court also approved its suggestion to have New York-based Mason Capital Management have its meeting of holders of Telus voting shares on Wednesday, too.
"The court rejected Mason Capital's attempt to halt or vary the Oct. 17 meeting called for by Telus," the Vancouver-based company said in a statement on Tuesday.
But Mason Capital Management said that it will appeal the decisions in favour of Telus (TSX:T) that were issued by the court, including holding the shareholder meeting.
"Mason believes that these decisions disenfranchise the Telus voting shareholders," the New York hedge fund said in a statement.
Telus said Mason's appeal will not prevent its shareholder meeting from going ahead on Wednesday.
The legal battle between Mason Capital and Telus (TSX:T) has been going on since the spring over the telecom company's plan to have one common class of shares.
Telus wants to convert its dual-class share structure, which separates shares that have voting rights and non-voting A shares (NYSE:TU).
Mason Capital has repeatedly said holders of Telus' voting shares should get a premium to approve it, something Telus has said its governing rules don't require it to do.
The hedge fund has proposed a minimum premium valuation of either 4.75 per cent — which represents the historic average trading premium of the voting shares over the non-voting shares — or a minimum premium of eight per cent.
Mason owns about 19 per cent of Telus's voting stock, making it the largest voting shareholder. However, Mason sold short almost the same amount in non-voting shares, essentially betting the price of those shares would fall if the share consolidation plan was defeated. Short sellers make a profit when the stock price falls.
It is a legal trading strategy in Canada based on the traditional gap in prices between the voting and less desirable non-voting shares. Telus has complained that Mason Capital was voting $1.9 billion worth of Telus's common shares with only a $25 million net economic stake in the company, calling it "empty voting."
Telus also said the court has agreed that a simple majority of the common share class and 66.67 per cent of the non-voting share class are required for its proposal to succeed.
"Telus' shareholders are exceedingly well informed and have a comprehensive understanding of both our share exchange proposal and the perspective communicated by Mason Capital," chief executive Darren Entwistle said in a statement.
Mason disagreed and said a simple majority vote for the voting shareholders on the conversion plan is less than the law of British Columbia and Telus' governing rules require.
The New York hedge fund also said shareholders need more information.
"As a result of the orders sought and obtained by Telus, the Telus arrangement resolution and Mason’s proposals will be put to a vote without voting shareholders having been provided with complete information, or a reasonable opportunity to consider and provide instructions on how their shares should be voted."
Telus said a vote in favour of its proposal to exchange non-voting shares for common shares on a one-to-one basis can be voted against Mason's resolution for a premium for voting shareholders.
"Similarly, a proxy granting authority to vote against Telus' share exchange proposal can be voted in favour of the Mason Capital resolutions," Telus said.
Voting shares in Telus moved up 33 cents higher to $63.18 Tuesday on the Toronto Stock Exchange, while non-voting shares added 22 cents to $63.26 on the New York Stock Exchange.Suggest a correction