According to the NY Times hedge funds are supposed to be the smart money, but
sometimes even they can be outsmarted. Take
the case of Mason Capital Management and the Telus Corporation, a large
Canadian telecommunications company. Mason Capital, a New York and London hedge
fund with about $8 billion in assets under management, has made a complex bet
in Telus stock that looked shrewd at first, but that may now lose tens of
millions of dollars.
Telus has two classes of shares, one that is voting and
trades only in Canada and another that is nonvoting and trades in Canada and
the United States. The nonvoting shares traditionally trade at a discount to
the voting shares, but Telus is proposing to convert the shares on a
one-for-one basis, giving a windfall to the holders of nonvoting shares.
Mason has taken a complex trading position in opposition to
the proposal. In April, the hedge fund announced that it had acquired 19
percent of Telus’s voting stock, worth 1.9 billion Canadian dollars, or $1.8
billion….
More? Go to http://www.cnbc.com/id/49174312
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