Lionsgate to board: reject Icahn's latest bid

Says $7.50-a-share takeover undervalues company

TORONTO -- No surprise here: Lionsgate has rejected Carl Icahn's latest $7.50-a-share takeover over to seize control of the mini-studio, deeming it under-valued.

In a filing with the Securities and Exchange Commission, Lionsgate executives said the hostile offer fails to reflect the full "strategic value" of the company, and is unfairly structured to pressure shareholders into tendering their stock.

Lionsgate urged shareholders to resist and reject Icahn's latest overture which, like earlier offers, is coercive.

"It is of paramount importance to the board that Lionsgate's shareholders be able to make a simple, value-based decision on whether to tender their shares, and not be subject to a creeping bid, a partial bid or other means that result in coercive or unfair attempts to take over the company without affording all shareholders the opportunity to sell their shares for fair value," the company said in its filing.

Lionsgate also rejected a key condition of Icahn's latest offer: rescinding a July 20 debt-to-equity transaction involving rival shareholder Mark Rachesky.

Rachesky, a former Icahn protégé, 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%.

"We believe that there is no basis for such an order, nor can we control whether this condition to the offer will be satisfied," Lionsgate said.

Icahn's sweetened offer appears timed around the Supreme Court of British Columbia on October 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.
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