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The TELUS Share Conversion Proposal Case Solution & Answer

The February 21, 2013, TELUS announced a proposal to convert non-voting shares of the company voting shares of one to one, eliminating the dual class structure of the company. Annex shareholders vote on the proposal at the Annual General Meeting (AGM) of the company, May 9, 2013. Despite strong support from the management board two proxy advisory firms and several large shareholders, the proposal was rejected by Mason Capital Management, a hedge fund based in New York. Mason, who controlled almost 20% of the shares entitled to vote and a large short position in the shares without voting rights, filed a dissenting powers circular recommending that shareholders vote against the proposal on the basis of two reasons procedural and substantive. With the success of the vote in doubt, the board had to decide what to do. If the vote as planned, delaying the vote intention to reintroduce the proposal sometime in the future, or cancel the proposal for good? And what to do with Mason, whose leadership considered “empty voting” in this case?
by
Lucy White,
Benjamin C. Esty,
Lisa Mazzanti
Source: Harvard Business School
18 pages.
Release Date: October 23, 2013. Prod #: 214001-PDF-ENG
Proposition solution upon conversion of shares of TELUS

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