Canadian regulators dismiss Icahn bid

Investor sought to overturn Lionsgate's debt-for-equity swap

TORONTO -- The British Columbia Securities Commission on Wednesday kicked to the courts an application by the Icahn Group to stop a debt-to-equity swap by Lionsgate.

The B.C. regulator dismissed a bid by Icahn to overturn the mini-studio's July 20 debt-for-equity swap with shareholder Mark Rachesky on grounds that a cease trade order was "not necessary in the public interest at this time."

The Icahn Group told the B.C. Securities Commission that Vancouver-based Lionsgate's debt-for-equity swap violated the provincial agency's statutory jurisdiction.

The B.C. Securities Commission disagreed, noting in its decision that "the court is the most efficient forum to resolve the issues."

A Lionsgate spokesman said late Wednesday: "We are pleased with the British Columbia Securities Commission's decision to deny the Icahn Group's application for a cease trade order against Lionsgate."

Icahn on Monday also filed a lawsuit in the New York State Supreme Court to rescind Lionsgate and Rachesky, a former Icahn protege, last week converting $100 million in senior notes to reduce Icahn's stake in the company from 37.3% to 33.5%, while upping Rachesky's stake.

Lionsgate's equity swap with Rachesky was made public last week a day after the end of a temporary ceasefire with Icahn, and the billionaire investor launching yet another tender offer for outstanding shares in the mini-studio, this time at a lower $6.50 price.