Rachesky emerges with new Lionsgate stock
To help thwart Carl Icahn's bid for control of the mini-studioTORONTO -- Lionsgate shareholder Mark Rachesky has seen his stake jump from 19.7% to 28.9% to help thwart Carl Icahn's bid for control of the mini-studio.
The move follows Rachesky, a former Icahn protege, and his MHR Fund Management shingle on Tuesday purchasing $100 million in senior notes from Kornitzer Capital Management, which is led by Lionsgate shareholder John Kornitzer, for $105.7 million.
The debt was then converted into a 9% equity stake, whose pickup will make Rachesky, a current Lionsgate board member, the company's second-largest shareholder.
The issuance of new shares by Lionsgate also effectively reduced Icahn's stake in the Vancouver-based company from 37.3% to 33.5%.
"The common shares ... represented an attractive investment opportunity," MHR Fund Management said in a statement late Tuesday.
Rachesky purchasing new Lionsgate stock means he could block Icahn from securing control of the mini-studio as he continues to side with its senior management, led by CEO Jon Feltheimer.
The latest chess moves in the battle for control of Lionsgate also follow Icahn on Tuesday launching yet another tender offer for outstanding shares in the mini-studio, this time at lower $6.50 price. Icahn conducted an earlier tender offer at $7-per-share that netted him a near-38% stake in Lionsgate.
The latest offer follows Icahn on July 9 agreeing to back off on his hostile bid for control of Lionsgate for 10 days to jointly work on M&A deals.
Lionsgate in a statement said its board of directors will review the latest takeover bid, which is set to expire Aug. 25, unless extended or withdrawn.