Lionsgate: Carl Icahn's Board Nominees Have Records of 'Failure and Value Destruction’
TORONTO – Locked in a proxy fight with Carl Icahn, Lionsgate on Wednesday branded the billionaire investor a “bitter bidder,” and trained its guns on his hand-picked nominees for the mini-studio’s boardroom.
As it continues to lobby shareholders ahead of next week’s AGM in Los Angeles, Lionsgate said Icahn’s five rebel director nominees either have no media experience or, if they do, sport records of “failure and value destruction.”
The indie studio said former Overture Films CEO Chris McGurk saw that film studio shut down, and had “unsuccessful tenures” at Universal and MGM.
Lionsgate was no less withering in its attack on Canadian TV producer Jay Firestone, whose production company Fireworks Entertainment was shuttered by parent Canwest Global Communications Corp. after it “burned through $100 million in financing on films such as “Onegin,” (grossed $206,128) and “Who is Cletis Tout,” (grossed $252,607).”
"In light of their failings at Overture and Fireworks, we believe it is unlikely these nominees would continue the success of Lionsgate’s board and management team,” the mini-studio told shareholders.
Icahn’s other three dissident nominees are former Bertelsmann Entertainment executive Michael Dornemann, Princeton economics professor Harold Shapiro, and Daniel Ninivaggi, president of Ichan Enterprises.
Lionsgate also reiterated criticism of Icahn, who holds a 33% stake in the company, for his own inexperience in media and “a frightening record” in building shareholder value.
“Mr. Icahn likes to brag about his fund making money for his investors, but he typically does not make money for shareholders of companies on which he or his representatives have secured board representation,” Lionsgate argued in its letter to shareholders.
The appeal to investors repeated the "bitter bidder" label slapped on Icahn in November by a British Columbia judge who dismissed a bid by the activist shareholder to rescind a July 20 note exchange and new share issue that increased a stake held by rival shareholder Mark Rachesky and reduced Icahn’s own holding.
The mini-studio on Wednesday defended the July debt-for-equity exchange with Rachesky, a transaction that threatens to thwart Icahn's chances of winning his proxy battle at next week's AGM by denying him much-needed votes.