Icahn's fight-or-flight approach to Lionsgate
Says he won't remain an investor with current managementTORONTO -- Carl Icahn on Monday promised to prevail or retreat grumbling in his upcoming proxy battle for control of Lionsgate.
In what is rapidly becoming a Punch and Judy show, Icahn said he will bow out of his fight with Lionsgate if he fails to install his own slate of directors at the mini-studio's upcoming annual shareholders meeting, likely in September in Toronto.
"Hopefully our slate will prevail. If not, I have no intention of remaining an investor in Lionsgate with this management team because it has become clear to me after talking with management that we will never agree on the future of the company," Icahn added in his latest open letter to shareholders.
The activist shareholder insisted Lionsgate needed to jettison costly film production and return to film distribution and TV production.
"Lionsgate cannot succeed following a strategy of swinging for the fences with big productions and hoping that DVD sales will cease their precipitous decline," he argued.
As Icahn and Lionsgate continue cross-fire appeals to shareholders before the activist shareholder's $7-per-share tender offer expires Wednesday, the billionaire investor argued that Lionsgate's film library could not be expected to feed the bottom line and service the company's debt load going forward.
"Am I the only one who sees a hurricane brewing?" Icahn argued.
He added that Lionsgate's management in film distribution and TV production was, ironically, "excellent in my opinion."
Icahn insisted that Lionsgate's top management and board were steering the company towards the rocks, and needed to be turned back from spending heavily for film libraries whose value was declining over time.
Lionsgate earlier on Monday hurled its own abuse at Icahn as it advised shareholders not to tender into his hostile takeover bid.