Carl Icahn increases Lionsgate bid

Mark Cuban reveals that he has paid $28 mil for 5.4% of firm

Lionsgate is attracting even more attention from high-profile billionaires.

Carl Icahn on Thursday upped his bid to purchase a controlling stake in the company -- if not the whole thing -- and Mark Cuban disclosed that he has paid $28 million for 5.4% of the company.

Icahn raised his offer from $6 a share to $7, causing the stock to leap 8% in after-hours trading Thursday to $6.89.

Whether Cuban's intent is to continue collecting shares while angling for some sort of say in how the mini-major film and TV studio operates or merely to flip his stock for a quick buck remains to be seen. He purchased his shares on the open market between March 23-April 8, paying $5.95-$6.23 a share, so he already has a healthy profit.

It's notable, though, that Icahn and Cuban have an existing business relationship. When Icahn launched a poxy war with Yahoo two years ago, one of his nominees to the Yahoo board was Cuban.

Icahn, meanwhile, issued another blistering rebuke to Lionsgate management, going so far as to quote those predicting that the $75 million Ashton Kutcher film "Killers," which opens June 4, will flop.

Icahn, who already owns 19% of Lionsgate, noted in his open letter to shareholders that his $7-a-share cash offer is $2.15 higher than where the stock traded two months ago, hinting that the stock's price would fall if he's not around to prop it up.

He also pointed out that J.P. Morgan, Lionsgate's banker, wrote in a research note that Icahn's lower bid of $6 a share already represented "a premium valuation for Lionsgate's film and TV business."

And though Lionsgate dismissed the $6 bid as too low, its board issued stock-appreciation rights to management last week at an exercise price of $5.17. How can the board sell shares to management at $5.17 while simultaneously telling shareholders that a $6 offer was "financially inadequate?" Icahn asked.

Icahn also takes Lionsgate to task for attempting to "frighten" shareholders into thinking that if Icahn purchases too many shares, it would result in the acceleration of $500 million of indebtedness.

"How the board can blame us for this problem -- which they created -- is beyond me," he wrote.

Besides, those "scare tactics" are disingenuous because Icahn already has said that he is prepared to discuss a bridge facility should any change-of-control provisions be triggered as a result of him purchasing Lionsgate shares.

Beyond acknowledging the revised $7-a-share bid, Lionsgate declined comment Thursday.