Carl Icahn has extended his $7 per share bid to buy out other shareholders of Lionsgate Entertainment. The company’s board and management, which are opposing the bid, note that less than 4% of the shares had been tendered as of Tuesday morning.
“Lionsgate’s shareholders have demonstrated that they believe the Icahn Group’s offer is financially inadequate. Lionsgate appreciates the continued support of its shareholders and notes that, while there is no need for shareholders to take action at this time, those shareholders who have tendered into the offer can still withdraw their shares,” said a statement from Lionsgate.
Icahn announced that 4,680,735 shares of Lionsgate had been tendered for his offer as of 11:00 am New York time on Tuesday. He is extending the offer until 8:00 pm on June 16th and has removed the condition that at least 36,985,976 be tendered.
He also lashed out at the board, calling it “reprehensible” that the board had set up a trust to hold approximately $16 million in cash to fund severance payments to senior management in the event of a change of control. He had previously castigated the board for trying to implement a “poison pill” provision, which was struck down by the British Columbia Securities Commission. The board’s appeal was also rejected by the British Columbia Court of Appeal.
“We continue to be concerned that the Board may engage in an inappropriate dilutive defensive acquisition or other transaction in an attempt to thwart our offer. We will not sit idly by if the Board attempts to employ inappropriate defensive tactics. We will challenge any proposed transaction that we perceive to be abusive of shareholder rights or otherwise disadvantageous to Lions Gate [sic], and will seek to hold the directors personally liable for any breach of their fiduciary duty or actions which oppress Lions Gate [sic] shareholders or serve simply to entrench themselves. In addition, we will not hesitate to enforce our rights against any third party that attempts to tortiously interfere with our offer by entering into an inappropriate defensive transaction with Lions Gate [sic],” said Icahn, misspelling the name of the company as he had done in previous announcements.
Beginning in February, Icahn had bid to increase his stake in Lionsgate at $6 per share and changed that to a bid for the entire company after meeting resistance from the board and management. More recently he upped that to $7, but is still opposed by the board.