Lionsgate Suing Carl Icahn
Insiders say billionaire was publicly against the studio's proposed merger with MGM, while "quietly amassing a huge position in MGM debt" in case the companies do become one.
Lionsgate is suing Carl Icahn, the minimajor’s sometimes friend, sometimes foe and all the time largest shareholder.
In a complaint filed by Lionsgate in U.S. District Court on Thursday, Lionsgate accuses the billionaire financier with securities fraud in the manner in which he has addressed a proposed merger of MGM and Lionsgate.
“Icahn has been misleading Lionsgate and its shareholders all along,” the film and TV minimajor alleges in its complaint. “While urging Lionsgate shareholders to support his takeover campaign ... to ensure that Lionsgate did not pursue what he called a ‘delusional’ MGM transaction, Icahn was quietly amassing a huge position in MGM debt with the undisclosed intention of reaping profits from both sides in an eventual merger. Now, having acquired substantial holdings in both MGM debt and Lionsgate shares, he is aggressively promoting a merger between Lionsgate and MGM.”
But simultaneously with the complaint’s filing, Lionsgate insiders were stressing that its management and Icahn now are firmly allied in pushing an MGM merger. Notably, the remedies sought in its court filing deal solely with Icahn’s ambitions with Lionsgate and not his moves on MGM.
The Lionsgate complaint names Icahn, son Brett Icahn and the Icahn Group as defendants. Lionsgate seeks a public correction of “material misstatements and omissions” by the Icahn Group.