On September 18, 2025, TELUS Digital (NYSE & TSX: TIXT) announced significant developments regarding its proposed arrangement with TELUS Corporation (TSX: T, NYSE: TU). This announcement comes ahead of a special meeting of shareholders scheduled for October 27, 2025, where shareholders will vote on TELUS Corporation's offer to acquire all outstanding shares of TELUS Digital for US$4.50 per share, a move that reflects an aggregate valuation of approximately US$539 million.

2. Key Highlights from the Press Release

Shareholder Meeting Scheduled: The special meeting will convene virtually at 9:00 a.m. Vancouver time, providing shareholders an opportunity to discuss the proposed arrangement.

Interim Court Approval: The Supreme Court of British Columbia granted an interim order on September 17, allowing the special meeting to proceed and establishing necessary procedures for the gathering.

Shareholder Value: TELUS Digital's Special Committee, composed of independent directors, unanimously believes the arrangement offers immediate value to minority shareholders that is unlikely to be matched if TELUS Digital remains an independent entity.

3. Premium on Share Value

The offer price of US$4.50 per share represents a remarkable premium of 52.0% over the unaffected closing price of US$2.96 per subordinate voting share on June 11, 2025. Furthermore, it indicates a 62.6% premium over the 30-day volume-weighted average price prior to June 12, 2025. This valuation underscores TELUS's commitment to providing tangible benefits to shareholders during this transitional phase.

4. Consideration Options for Shareholders

Under the terms of the arrangement, TELUS Digital shareholders will have the option to choose from three consideration alternatives for each share:

US$4.50 in cash

0.273 of a TELUS common share

A combination of US$2.25 in cash and 0.136 of a TELUS common share

Shareholders opting for share alternatives will be subject to proration, ensuring that no more than 25% of the total consideration comprises TELUS common shares.

5. Independent Review and Board Recommendation

The Special Committee conducted a rigorous independent review of the arrangement, leading to a unanimous recommendation in favor of the proposal to the Board of Directors. This recommendation was bolstered by a negotiation process that resulted in an upward revision of TELUS's initial offer from US$3.40 to US$4.50 per subordinate voting share. The Board's decision was predicated on a thorough evaluation of the arrangement's fairness to minority shareholders.

6. Support from Major Shareholders

The arrangement has secured backing from Riel B.V., TELUS Digital’s largest minority shareholder, which holds approximately 37.7% of outstanding subordinate voting shares following a recent conversion of multiple voting shares. Additionally, the directors and officers of TELUS Digital, who collectively control about 2.9% of the outstanding shares, have expressed their support for the transaction.

7. Next Steps and Voting Information

If approved, the transaction is anticipated to close by the end of October 2025, contingent upon final court approval and customary closing conditions. Notably, no Foreign Direct Investment (FDI) regulatory approvals are required for this arrangement.

The circular detailing the arrangement's terms, independent valuations, and the rationale behind the Board's recommendations will soon be distributed to shareholders. Voting will take place online, via telephone, or by mail, with detailed instructions included in the circular.

8. Conclusion

This significant strategic move by TELUS Digital reflects a broader trend of consolidation within the telecommunications and digital services sectors, aiming to enhance growth and operational capabilities. As the special meeting approaches, stakeholders will closely monitor the developments surrounding this arrangement, which promises to reshape TELUS Digital's future in collaboration with TELUS Corporation.

Original press release