# LifeWorks, Telus acquisition (in plain English please)



## Tostig (Nov 18, 2020)

I thought there was another thread specifically about Lifeworks or specifically about the Telus acquisition of Lifeworks. I didn’t want to add this discussion under the existing Telus thread.

I have just received the Notice of Special Meeting of Shareholders, Management Circular in the mail.

Part I
Although I have known about the three options LWRK shareholders have to make, I thought that receiving and reading the Circular would clarify option 2 but it doesn’t.

Here is the wording:



> Q: What will I receive for my Shares under the Arrangement?
> A: Under the terms of the Arrangement, as more particularly described in this Circular, you can elect to receive in respect of all of your Shares (and for greater certainty, not a portion of such Shares), at the effective time of the Arrangement either:
> (i) $33.00 in cash; or
> (ii) 1.0642 TELUS Shares, subject in each case to proration, such that the aggregate consideration to be paid to Shareholders will consist of 50% cash and 50% TELUS Shares; or
> (iii) 0.5321 TELUS Shares and $16.50 in cash, for each Share transferred.


Can someone kindly explain option (ii) in plain English using for example 100 shares of LWRK? Options (i) and (iii) seem clear and straight forward enough.

Part II


> Q: How do I elect to receive my Consideration under the Arrangement?
> A: Shareholders whose Shares are held through a broker, investment dealer, bank, trust company or other intermediary (ie Beneficial Shareholders) should follow the instructions provided by such intermediary in delivering such Shareholder’s Shares and, if applicable, making and election with respect to the form of Consideration such Shareholder wishes to receive. *To be valid, Beneficial Shareholders’ elections must be received by the Depositary prior to the Election Deadline, being 5:00 p.m. (Toronto time) on July 29, 2022 or, if the Meeting is adjourned or postponed, the Business Day which is three (3) Business Day’s preceding the date of the reconvened Meeting. *As all Shares are held in book-entry form in the name of CDS & Co., there is no need for any Shareholder to return a Letter of Transmittal and Election Form or deliver any share certificates.


There are two dates in consideration. The first is the shareholder vote on August 4, 2022, to approve the Telus acquisition of Lifeworks.

The second date I am interested in is when each shareholder has to tell his or her broker which of the three options he or she chooses. However, the quote from the Circular (above) looks like it’s July 29, 2022 which is only a few weeks away and before the Special Shareholders meeting of August 4th. This doesn’t make sense. Just to make sure, I logged into my BMO Investorline Account and looked in MyLink to check for any messages about Lifeworks. None. I should be expecting a notice from BMOIL requesting that I take action.

Again, can someone please explain to be in plain English what if what I wrote is correct or what I should be expecting?
Thanks in advance.


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## Covariance (Oct 20, 2020)

I’m only going by what you posted. My interpretation is that under Option 2 you are electing to receive Telus shares only. No cash. However, the total they wish to pay out to all shareholders for the company needs to be 50%Telus shares and 50% cash. If you choose option 2 you will adjusted downward if to many people want Telus shares so that they get to the 50%.


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## Tostig (Nov 18, 2020)

Covariance said:


> I’m only going by what you posted. My interpretation is that under Option 2 you are electing to receive Telus shares only. No cash. However, the total they wish to pay out to all shareholders for the company needs to be 50%Telus shares and 50% cash. If you choose option 2 you will adjusted downward if to many people want Telus shares so that they get to the 50%.


Thanks. Much clearer.

I just wrote an email to BMO Investorline about (Part II) the date and how I am to advise them of my decision.


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## Numbersman61 (Jan 26, 2015)

Tostig said:


> I thought there was another thread specifically about Lifeworks or specifically about the Telus acquisition of Lifeworks. I didn’t want to add this discussion under the existing Telus thread.
> 
> I have just received the Notice of Special Meeting of Shareholders, Management Circular in the mail.
> 
> ...


Are you a shareholder of both Telus and Lifeworks? If yes, you can elect to do nothing with regards to your shares in Lifeworks. In that case, provided the votes cast approve the transaction, you will automatically receive the Combination Consideration - 50% Telus shares and 50% cash.


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## Tostig (Nov 18, 2020)

Numbersman61 said:


> Are you a shareholder of both Telus and Lifeworks? If yes, you can elect to do nothing with regards to your shares in Lifeworks. In that case, provided the votes cast approve the transaction, you will automatically receive the Combination Consideration - 50% Telus shares and 50% cash.


I only own Lifeworks. I am considering either taking the 1) $33 per share cash; or 3) Telus shares and $16.5 per share cash.

I have been transitioning to buying ETFs like XIU and VFV so I was considering taking the cash.

But Telus is already on my watch list and all it takes is for its share price to go to $31.01 for the values of option 2 and 3 to match the $33 cash option. And option 3 will give me enough cash to recover most of my initial investment of MSI before it was LWRK so that I can continue to invest more in XIU and VFV.


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## Covariance (Oct 20, 2020)

Tostig said:


> I only own Lifeworks. I am considering either taking the 1) $33 per share cash; or 3) Telus shares and $16.5 per share cash.
> 
> I have been transitioning to buying ETFs like XIU and VFV so I was considering taking the cash.
> 
> But Telus is already on my watch list and all it takes is for its share price to go to $31.01 for the values of option 2 and 3 to match the $33 cash option. And option 3 will give me enough cash to recover most of my initial investment of MSI before it was LWRK so that I can continue to invest more in XIU and VFV.


Is there a benefit in taking shares over cash, from a tax perspective?


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## Tostig (Nov 18, 2020)

Covariance said:


> Is there a benefit in taking shares over cash, from a tax perspective?


My holding is in my TFSA. So I don't worry about any tax implication.

However if it were in a taxable account whatever proportion of LWRK is converted into cash is subject to capital gains ( that is, 50% of the capital gains is taxable).

Option 1) will be 100% subject to capital gains; 2) should be zero since my initial investment in MSI would still be fully invested; 3) 50% of LWRK will be converted into cash so it's only that portion is subject to capital gains.


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