Montreal: A subsidiary of information technology and telecom management company Telesystem, Telesystem Financial Corporation has emerged as Coscient Group’s principal shareholder. In less than a month, Telesystem acquired shares held by two individuals in Coscient’s management-control group, a major shareholder exercising its follow-up right, and shares traded on the open market, combining for 20.5% of Coscient’s fully-diluted shares.

The investment has cost Telesystem $18.6 million.

The development gives publicly traded Coscient a leading shareholder with management control of combined corporate assets of over $8 billion, including Teleglobe and Microcell, a level of capitalization well above any of the existing players in the Canadian industry.

Telesystem says its investment in Coscient is part of a corporate strategy to converge telecommunications, it and content, but the move may also be the signal for some serious corporate and strategic rethinking on the part of Canada’s larger production companies.

And while there is no formal statement from Coscient’s board, there is an explicit vote of confidence in Telesystem, controlled by businessman Charles Sirois.

None of Coscient’s seven or eight principal shareholder groups, including subsidiary managers, with the exception of Cogeco, have exercised a follow-up option to sell off shares, including company chairman Yves Moquin.

With the full dilution of all shares, the control group of Moquin and senior executives Laurent Gaudreau and Richard Laferriere remain in their respective management positions, but they no longer control the company.

Some jockeying at the board level, perhaps less than first envisioned, seems likely.

Telesystem’s director of communications Michele Beaubien says the first order of business is to gain a seat on Coscient’s board.

‘That’s our next step,’ she says. ‘We’ll see what happens at the next meeting.’

Coscient’s board is scheduled to meet July 15.

Telesystem intends to ask for a directorship for Guy Crevier, Telesystem’s senior vp, and according to Beaubien, will also take the position that Gaudreau and Laferriere retain their directorships.

Coscient currently has 13 directors on its board, plus a secretary.

Both Gaudreau and Laferriere played a decisive role in opening the door for Telesystem in early June when they agreed to sell to Sirois.

‘For us, continuity is very important,’ says Beaubien. ‘These people have the experience and we would like them to stay on.’

Coscient shareholders now include the Caisse de Depot investment unit cdpq, which holds 10.3% of the fully diluted stock; Moquin, who has 9.4%; Royal Bank Capital Corp., which holds 5.2%; and Astral Communications with 4.7%. The balance of the shareholders hold 52.1%.

Crevier is a former vp news and public affairs with Group tva and president of Videotron. His responsibilities at Telesystem include the development and acquisition of content producers.

Telesystem has spent $18.6 million for 20.5% of Coscient.

The action opened June 4 when Coscient announced Gaudreau and Laferriere had accepted an offer from Telesystem to sell 2.37 million shares for $10.9 million, or $4.60 a share. While Moquin had until July 2 to match the offer, Telesystem used the delay to acquire an additional 897,200 Coscient shares on the open market, then subsequently paid out $3.3 million for 625,604 shares held by Cogeco, which exercised its follow-up right.

Controlled by Sirois, Telesystem owns 19% of Teleglobe and 31% of Microcell and is the managing shareholder for both companies. The Telesystem group of companies also includes Telesystem International Wireless, Spectra Telecom, Telsoft, Microtec and Public Technologies Multimedia.