Carl Icahn bids to buy all of Lionsgate


After the board of directors urged shareholders to reject a bid by Carl Icahn to increase his stake in the TV and movie production/distribution company, Icahn has fired back with an offer to buy out all other shareholders of Lionsgate.

“Due to management’s recent actions, I am now convinced that Lions Gate [sic] shareholders will never have the right to make important decisions. I am dismayed that Lions Gate’s board of directors chose to implement a poison pill and thus deny their shareholders the opportunity to participate in our Offer. I believe these tactics serve only to strip shareholders of an opportunity and entrench management. Lions Gate previously criticized our tender offer for being partial. That is no longer the case,” Icahn said in a statement Friday.

Rather than bidding to buy 13,164,420 shares, which would have increased his stake from 18.9% to 29.9%, Icahn is now offering to buy up to all Lionsgate shares for $6 each.

If successful, Icahn says he would replace the board of directors with his own nominees. Since Lionsgate is incorporated in Canada, he noted that several of his nominees for the new board would be Canadian citizens. While not specifically mentioning CEO Jon Feltheimer, Icahn indicated that he would likely replace top management with individuals who share his vision for the company.

Icahn has opposed having Lionsgate spend large sums to acquire film libraries. The company has been rumored to be among the bidders interested in the MGM and Miramax libraries, both of which are known to be on the market.

Due to actions taken by the board to thwart his unwanted advances, Icahn has made his bid to buy more shares of Lionsgate subject to certain conditions.

“The amended Offer is conditioned on, among other things, there having been validly tendered and not withdrawn a number of Lions Gate common shares which, together with the common shares already owned by the Icahn Group, would constitute at least 50.1% of Lions Gate’s common shares (taking into consideration options and restricted stock). The Icahn Group has the right to waive this condition and any other condition, subject to applicable law. In addition, the amended Offer is conditioned on: (i) all rights issued or issuable under the poison pill adopted by Lions Gate’s board of directors on March 11, 2010 having been cease-traded, found to be illegal or unenforceable, redeemed by the board, or otherwise eliminated; and (ii) the receipt by the Icahn Group of all government or regulatory approvals necessary to complete the amended Offer (including Investment Canada Act approval) on terms and conditions satisfactory to the Icahn Group in its reasonable judgment,” said Friday’s announcement of the revised tender.

With the new terms, the tender has now been extended to April 30th – an extension of one day from the original tender deadline.