Lionsgate swaps debt, dilutes Icahn


As Lionsgate Entertainment battles a hostile takeover effort by Carl Icahn, the company announced Tuesday afternoon that it had swapped $100 million of its bonds for stock, reducing its leverage. At the same time it also reduced Icahn’s stake in the company from 37.9% to around 33.5%.

“The transaction was effected by the Company’s wholly owned subsidiary Lions Gate Entertainment Inc. pursuant to the exchange of $36,009,000 in aggregate principal amount of its 3.625% Convertible Senior Subordinated Notes due 2025 and $63,709,000 in aggregate principal amount of 2.9375% Convertible Senior Subordinated Notes due 2024 in a private transaction.  The notes were exchanged for new notes which were identical to the old notes but had an extended maturity date and extended put rights by two years and were immediately convertible at an initial conversion rate of 161.2903 Common Shares of the Company per $1000 of notes.  The notes were subsequently converted into 16,236,305 common shares,” said the announcement from Lionsgate.

The conversion price was $6.20 per share. The company noted that was a slight premium to the Monday closing price of $6.03. The company’s stock price closed Tuesday at $6.53 after Icahn announced his new bid at $6.50.