Only 13% of all Lionsgate Entertainment shares were tendered for billionaire Carl Icahn’s $7 per share offer, but that will boost Icahn’s stake to nearly 32%. He is continuing his campaign to oust the current board and announced a new tender offer – also at $7 per share.
By gaining a stake of greater than 20% Icahn has forced Lionsgate into technical default on its credit agreements. Icahn says the directors have only themselves to blame for that predicament. The board is again advising shareholders not to tender their shares under Icahn’s new tender. It says discussions are continuing with Lionsgate’s lenders on a waiver or amendment to the loans and that the company “is highly confident that it will obtain that waiver or amendment shortly.”
The board is claiming victory, since more than 68% of Lionsgate’s shareholders rejected Icahn’s offer and did not tender their shares. In a statement, the board thanked shareholders “for their continued support” in refusing to tender.
Likewise, the board of directors of the independent movie and TV studio advised shareholders not to tender their shares under the new Icahn offer, which is scheduled to expire June 30th.
RBR-TVBR observation: The costly battle goes on. After months of trying, Icahn has not yet been able to gain control of Lionsgate – not at $6, his original offer, and not at $7, at least not so far. At the very least, the board of Lionsgate is going to have to deal with a dissident investor as its largest shareholder.