Lionsgate offers Icahn roadmap to control

Calls for 50% tender condition

TORONTO -- Lionsgate on Monday offered Carl Icahn a "roadmap" to taking control the indie studio without triggering a proposed poison pill defense.

In a letter to shareholders ahead of a May 4 vote on a shareholders rights plan, Vancouver-based Lionsgate called on the Icahn Group to complete its unsolicited $6 a-share takeover bid "only if more than 50% of the outstanding shares held by shareholders that are independent of the offeror have been tendered to the bid and have not been withdrawn."

Lionsgate, which is urging shareholders to reject Icahn's as-is offer as inadequate and coercive, further advised the billionaire investor to tell fellow shareholders when he had satisfied the 50% tender condition, and to offer them ten days extra to sell their shares.

"This permits shareholders who do not wish to be invested in an Icahn-controlled company to exit their investment at the same price only after knowing whether the Icahn Group is successful with its offer," Lionsgate wrote to shareholders.

And while not agreeing with Icahn's earlier contention that film library values are in "secular decline," and Lionsgate should never have sized up the Miramax or MGM catalogues, the indie studio did concede in its shareholder letter that "film and television library values are currently being pressured by the numerous studio assets presently on the market."

The unsolicited advice to Icahn comes as Lionsgate and Icahn continue to bombard shareholders and financial regulators with letters and filings to seize advantage in their messy fight for control of the indie studio.

Icahn currently has an 18.9% stake in Lionsgate, and has been thwarted by the studio's current management from installing his own representatives in the boardroom.
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