Icahn increases bid for Lionsgate

Revised $7.50 per share offer to expire on Oct. 22

TORONTO -- Carl Icahn has lifted his hostile takeover bid for Lionsgate to $7.50 per share to take control of the mini-studio and replace its top management.

"The Icahn Group has determined, in order to protect the large position it now holds, that it is necessary to gain control of Lions Gate (Entertainment) and remove the current board," the activist shareholder said in a statement.

Icahn on Tuesday said his revised offer, to expire on Oct. 22, is in part contingent on a July 20 debt-to-equity transaction involving rival shareholder Mark Rachesky being rescinded or converted to non-voting shares.

Rachesky, a former Icahn protege, in that deal bought and converted $100 million in senior notes to reduce Icahn's stake in the Vancouver-based company from 37.3% to 33.5%.

Icahn's sweetened offer appears timed around the Supreme Court of British Columbia on Oct. 12 hearing a July 23 legal petition against the Lionsgate-Rachesky transaction from the Icahn Group.

Icahn said the British Columbia court setting aside the note exchange and new share issue to Rachesky and his investment fund would satisfy the condition associated with the July 20 transaction by the mini-studio.

Lionsgate in its own statement said its board of directors will review the revised tender offer, before making a recommendation to shareholders.

Icahn added that he wasn't holding his breath over the Lionsgate board accepting his sweetened $7.50 offer.

"The Icahn Group believes that this board will stop at almost nothing to entrench its position at the expense of shareholders," he said in a statement.

That in turn has Icahn offering what he termed "a large premium" for control of Lionsgate, ahead of a threatened proxy fight at the mini-studio's upcoming annual shareholders meeting to replace the current board of directors and senior management.
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