Rather than $6.50 per share, or his previous offer of $7.00, Carl Icahn now says he’s willing to pay $7.50 to buy out all other shareholders of Lionsgate Entertainment. The company’s board, which up to now has said “no,” says it will consider the new bid.
There are, however, significant conditions to Icahn’s latest offer. One is that the equity-for-debt swap with a hedge fund in July be either rescinded or the newly issued stock converted to a non-voting class which will not be cashed out by Icahn’s tender offer. Another, which is more routine, is that the shares tendered, combined with those that Icahn already owns, must amount to at least 50.1% of Lionsgate’s total shares, thus giving Icahn control of the company.
His tender offer, which is scheduled to expire on October 22nd, seeks to buy up to all of the shares of the TV/movie production/distribution company not already owned by Icahn. Depending on whether or not the new shares held by the hedge fund are counted, Icahn already owns either 39% or 34% of Lionsgate’s stock.
The corporate takeover artist said he is fighting in a Canadian court the second poison pill adopted by the Lionsgate board to thwart his takeover attempts. The first was struck down by a court order and Icahn said in a statement that “Canada’s corporate governance e regime is excellent.” As you would expect, his current tender offer is contingent on the poison pill being either invalidated by the court or not triggered by the Lionsgate board.
“Consistent with its fiduciary duties and in consultation with its financial and legal advisors, Lionsgate’s Board of Directors will review Mr. Icahn’s revised offer and will make its recommendation to shareholders promptly,” the board said in a statement. “Lionsgate added that there is no need for shareholders to take any action at this time,” the statement said.