Sides taken in Lionsgate fray Largest shareholder Rachesky supports studio against ex-boss Icahn

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In Carl Icahn vs. Lionsgate, the mini-major behind the movies "Crash" and "Saw" has gained an important ally: Mark Rachesky.

Rachesky is a former employee of Icahn, and he disclosed Wednesday that he has increased his stake in Lionsgate to a smidgen under 20%, being careful not to trigger a change-of-control provision that could harm the company by forcing it to make early debt payments.

Rachesky's 19.999% stake in Lionsgate makes him the largest shareholder, easily beating Icahn's 14.5% stake. And in his Wednesday filing, Rachesky said he seeks a spot on the Lionsgate board of directors for himself or a representative.

Icahn recently was thwarted in his attempt to get three representatives, including his son, on the Lionsgate board by kicking off existing directors. Shortly thereafter, he made an offer to buy $325 million of Lionsgate's debt.

His moves, and Lionsgate countering by hiring a law firm to help fend off any unwanted advances, indicate a proxy battle or hostile takeover could be in Lionsgate's future. Rachesky, though, is "principally supportive" of Lionsgate's present management team and their "publicly stated strategies," according to his filing.

Icahn is offering 73 cents- 75 cents on the dollar for the debt, but it is no slam dunk he'll find willing sellers. All the wrangling, though, has at least boosted the stock price 14% during the past five trading days, with shares closing at $5.35 on Wednesday.

That's still a far cry from the $6.80 average per-share price that Icahn paid for the stock he owns.

Although Rachesky has been largely a passive Lionsgate investor — certainly relative to Icahn — for several years, his filing Wednesday indicates he's about to get more active and that he might even support a sale of the company.

Rachesky and his partners, according to the filing, might "consider, formulate and implement various plans or proposals intended to enhance the value of their current or future investment" in Lionsgate. (partialdiff)
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