Proxy Advisor Backs Majority of Carl Icahn's Lionsgate Board Nominees
TORONTO -- As their PR war heats up ahead of next week's shareholder meeting, Lionsgate Entertainment and Carl Icahn on Thursday rolled out proxy voting advisors aligned on each side of their battle for control of the indie studio.
Icahn led off with qualified support for his dissident nominee slate as advisor Institutional Shareholder Services (ISS) recommended Lionsgate shareholders vote for three of his boardroom choices: Canadian TV producer Jay Firestone, former Bertelsmann Entertainment
executive Michael Dornemann and Daniel Ninivaggi, president of Ichan Enterprises.
That left ISS to deny support for former Overture Films CEO Chris McGurk and Princeton economics professor Harold Shapiro, who round out Icahn's proxy slate.
At the same time, the billionaire investor also pointed to earlier support from yet another proxy advisory firm, Egan-Jones, which recommended that Lionsgate shareholders support Icahn¹s entire proxy slate.
ISS backed Icahn in previous proxy battles, and its latest partial boost included criticism of Lionsgate for battling its largest shareholder as it gave another major investor, Mark Rachesky, an advantage with a July debt-for-equity exchange.
"The (Lionsgate) board has demonstrated a disturbing concern with gaining tactical advantage over one large dissident shareholder, yet in the process demonstrated little regard for the collateral damage - particularly from heavily dilutive insider transactions in July - to other, unaffiliated shareholders," ISS said in a statement Thursday.
Icahn welcomed the partial victory from ISS as he lobbies Lionsgate shareholders ahead of the December 14 AGM in Los Angeles.
"We are gratified that ISS shares our belief that change is needed at Lionsgate, both operationally and at the board level and supports the election of our nominees," he said in his own statement.
Not to be outplayed by Icahn in its own appeal to shareholders, Lionsgate revealed that key proxy advisor Glass Lewis & Co. had rejected all five of the dissident board nominees put forward by its largest investor and arch-rival.
"In making its recommendation to reject the Icahn Group's director nominees, Glass Lewis cites the Icahn Group's lack of a clear plan and concerns about conflicts of interest," Lionsgate said in a statement Thursday.
The mini-studio also claimed victory with ISS rejecting two of Icahn's five dissident nominees.
And Lionsgate urged shareholders yet again to support its own 12-strong slate of board nominees as Icahn had no apparent plans of his own to boost shareholder value, and a myriad of conflicting interests.
"Perhaps most notable, however, is the substantial absence of a plan by the dissident...we see no disclosure that suggests that the dissident nominees have a framework around which to build an improved Lions Gate," the mini-studio said in a statement.
"To the contrary, the only plan that may reasonably be implied by available disclosure is the potential combination of the company and MGM, a notion buttressed by the dissident's substantial debtholding in MGM, his staunch opposition to MGM's combination with Spyglass Entertainment, and his nomination of Christopher McGurk, a former vice-chairman of MGM, to the Lionsgate board," it added.
Lionsgate's 2010 annual general meeting of shareholders is set for December 14 at 10:00 a.m. in Los Angeles.