Icahn's Lionsgate gambit falls short

Investor loses ground in attempt to hold sway over board

Carl Icahn's bid to amass Lionsgate debt so that he could hold more sway over the company has largely been a bust.

The investor, who owns about 14.5% of the studio, has purchased $583,000 worth of Lionsgate's $316 million in outstanding bonds, according to a regulatory filing.

Having failed to convince Lionsgate to allow him to replace some board members, Icahn on March 20 launched an effort to buy up debt. Lionsgate countered by refinancing almost $67 million in debt, which prompted Icahn to extend his offer beyond an April 20 deadline.

Icahn did just that, and the new deadline expired Friday. When Icahn announced his extension, he said he had less than $9 million in bonds lined up, indicating that when all was said and done, his extension actually reversed any traction he might have had, resulting in him obtaining far less than expected.

Icahn's reputation, though, is that he is not one to give up without a fight, especially concerning an investment that, so far, is a money-loser.

Icahn could choose to purchase more stock and/or resume a proxy battle. If he intends to offer a slate of board members to elect he'd need to do it in the next month or so as Lionsgate's shareholder meeting is scheduled for September.

One reason Icahn might have failed to secure more of Lionsgate's debt is that his offer amounted to less than what the bonds were trading for on the open market.

Lionsgate shares dropped fractionally Tuesday to $5.01.