NEW YORK, N.Y. - A U.S. hedge fund says the B.C. Court of Appeal will expedite a hearing for its challenge of a ruling in favour of Telus (TSX:T) (TSX:T.A).
A lower court decision prevents Mason Capital Management from holding a meeting for only Telus voting shareholders on Oct. 17, the same day that the telecom company plans a meeting for both classes of shareholders.
Mason is opposed to Telus's plan for eliminating its dual-class share structure without paying a premium to voting shareholders, including itself, to reflect their higher value on the open market.
The Telus plan is for a one-to-one exchange that Mason argues is biased in favour of the shareholders with non-voting stock. Telus argues that the company's bylaws say there is no difference between the two classes, except one has voting rights, and that only Mason stands to benefit from the alternate plan.
Telus voting shares closed Monday at $61.19 on the Toronto Stock Exchange, 40 cents a share more than the A shares on the same market. The gap between the two prices was greater before Telus announced its conversion plan.
Mason said the appeal will be heard on Oct. 4.
"Mason believes it has strong grounds of appeal, and that it is critical that the owners of the Telus voting shares have the opportunity to vote on a binding change to Telus' articles that would establish an appropriate minimum premium for voting shares in a dual class collapse transaction," the hedge fund said in a statement Tuesday.
In B.C. appeals are automatically granted a hearing at which the other party can seek a dismissal if the appeal is found to be without merit.
Telus said it's confident Mason's appeal will fail and the hedge fund should vote at its Oct. 17 meeting.
"The original court decision was strong," spokesman Shawn Hall said.
"Rather than continue trying to confuse matters and frustrate a properly called meeting of our shareholders, if Mason really believes an exchange should proceed on a different exchange ratio they should cease their court proceedings and simply cast their votes at our meeting."
Telus and Mason are locked in battle over the Canadian telecom company's plan to convert its dual-class share structure of common shares (TSX:T) that have voting rights and non-voting A shares (TSX:T.A).
Mason has said it wants to hold its meeting to set a minimum premium for voting shareholders in any consolidation of the shares.
Mason owns nearly 20 per cent of Telus' voting shares but it has also "sold short'' some of its shares — a stock-trading manoeuvre that Telus argues reduces Mason's true holding to less than one per cent of the company's economic value.