Glass Lewis joins ISS in reiterating recommendation that TELUS shareholders vote in favour of share conversion proposal

VANCOUVER, April 30, 2012 /CNW/ - Independent proxy advisory firm Glass, Lewis & Co., LLC (Glass Lewis) has reiterated its recommendation to institutional clients that they vote in favour of a proposed transaction that would eliminate TELUS' dual class share structure. This follows a positive recommendation reiterated separately by the other leading proxy advisory firm Institutional Shareholder Services (ISS).

Glass Lewis originally issued the recommendation in a report posted on April 23. It withdrew the report a day later to consider a dissident proxy circular issued by Mason Capital, a New York hedge fund seeking to defeat the proposal for its own short-term profit at the expense of TELUS' numerous other shareholders, and rejected their position.

In its updated report, Glass Lewis writes: "Mason has stated that it would 'favourably consider a revised proposal that pays an appropriate premium,' however, it has given no indication or analysis regarding the specifics of such a proposal. We consider Mason's failure to provide an agreeable conversion ratio to be another indicator of its short-term interests in the Company, as Mason appears to prioritize the cessation of any share conversion over the realization of a more appropriate premium. We are also particularly troubled by the brief period in which Mason has been invested in the Company as well as its outstanding short position which, in our opinion, call into question the Dissident's motives for opposing the conversion."

Glass Lewis concludes they "continue to consider the simplified share structure and improvement in corporate governance resulting from the Conversion to be in the long-term best interests of both common and non-voting shareholders. Accordingly, we recommend that shareholders vote FOR this proposal."

The prices of both TELUS Common Shares and Non-Voting Shares increased strongly when the company announced the share conversion proposal February 21 and have increased further since then, demonstrating strong investor support for the plan. As of close of market Friday, April 27, the market value of TELUS Common Shares has increased by about $535 million - 5.5 per cent - while the Non-Voting Shares have increased by approximately $583 million - 7.2 per cent. The TSX declined 3.1 per cent in the same period.

"Following thorough analysis, the two leading proxy advisory firms have each stood by their positive recommendations in favour of TELUS' proposal, confirming this plan is in the best interests of both common and non-voting shareholders," said Darren Entwistle, TELUS President and CEO. "This is an important proposal that, if successful, will enhance TELUS' share liquidity and value for all long-term shareholders while advancing good governance. I urge all shareholders to participate in the vote, and support our proposal."

Shareholders can vote online until May 7 by visiting www.telus.com/shareconversion. Under the terms of TELUS' proposal, each Non-Voting Share would be converted into a Common Share on a one-for-one basis if supported by two-thirds of the votes cast by holders of Common Shares and Non-Voting Shares, each voting separately.

On Thursday, TELUS sent a letter to its shareholders refuting Mason's position and asking for their support in the current vote on its proposal.

TELUS has filed and mailed a management information circular and related documents for shareholders in connection with the annual and special meeting. Copies of these materials have been publicly filed and are available under the Company's profile on SEDAR at www.sedar.com or on the Company's website at www.telus.com. Any questions or requests for voting assistance should be directed to either Laurel Hill Advisory Group Company by phone at 1-877-452-7184 or email at [email protected]; or CIBC by phone at 1-866-744-2030 or email at [email protected].

Background

TELUS has previously communicated that the share conversion was proposed in response to feedback from significant institutional shareholders and would result in the extension of voting rights to all TELUS shareholders. The proposed one-for-one conversion ratio is consistent with the company's Articles in the event that foreign ownership restrictions are eliminated and past proposed transactions such as the planned Income Trust conversion in 2006 where both classes were to receive one trust unit for each share. The Non-Voting Shares have the same economic interest in TELUS as the Common Shares with the same dividends and strong liquidity and takeover coattail rights that ensure equal economic participation in a takeover premium.

The benefits of the proposal include:

• Enhancing the liquidity and marketability of the Common Shares, including through a listing of the Common Shares on the NYSE for the first time. TELUS has approximately 175 million Common and 150 million Non-Voting Shares outstanding. The proposal would result in one Common Share class with approximately 325 million shares outstanding.
• Enhancing TELUS' leadership in respect of good corporate governance practices by granting the right to vote to shareholders holding approximately 46 per cent of the shares who have the same economic interest in the Company as the Common shareholders.
• Aligning the capital structure of the Company with what is generally viewed as best practice - one single share class.
• Addressing concerns expressed by some shareholders about the impact of TELUS' dual class share structure on liquidity and trading volumes.

Furthermore, TELUS retains the ongoing ability to comply with foreign ownership restrictions and the proposal does not affect the earnings per share and dividend paid per Common Share and Non-Voting Share.

This news release contains statements about expected future events of TELUS that are forward-looking. By their nature, forward-looking statements require the Company to make assumptions and predictions and are subject to inherent risks and uncertainties. There can be no assurance that the proposal will receive voting approval and if not approved the market price of Non-Voting Shares and/or Common Shares may decline, given that share prices in both classes increased on the announcement of the proposal. There is significant risk that the forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors could cause actual future events to differ materially from that expressed in the forward-looking statements. Readers should review the risks and uncertainties set out in the "Forward Looking Statements" section at page 14 of TELUS' 2012 Information Circular, available at www.sedar.com. Except as required by law, TELUS disclaims any intention or obligation to update or revise forward-looking statements. Permission was not requested to quote from the Glass Lewis Report.

About TELUS

TELUS (TSX: T, T.A; NYSE: TU) is a leading national telecommunications company in Canada, with $10.4 billion of annual revenue and 12.7 million customer connections including 7.3 million wireless subscribers, 3.6 million wireline network access lines and 1.3 million Internet subscribers and more than 500,000 TELUS TV customers. Led since 2000 by President and CEO, Darren Entwistle, TELUS provides a wide range of communications products and services including wireless, data, Internet protocol (IP), voice, television, entertainment and video.

In support of our philosophy to give where we live, TELUS, our team members and retirees have contributed more than $250 million to charitable and not-for-profit organizations and volunteered 4.2 million hours of service to local communities since 2000. Eleven TELUS Community Boards across Canada lead TELUS' local philanthropic initiatives. TELUS was honoured to be named the most outstanding philanthropic corporation globally for 2010 by the Association of Fundraising Professionals, becoming the first Canadian company to receive this prestigious international recognition.

For more information about TELUS, please visit telus.com.

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