Lionsgate makes debt-to-equity conversion

$100 mil in senior sub notes converted into common shares

TORONTO -- In the latest twist in its battle with Carl Icahn, Lionsgate on Tuesday afternoon said it converted $100 million in senior subordinated notes into common shares at $6.20 each.

The price for the debt-to-equity conversion represents a 2.8% premium above the Monday closing price of $6.03 for Lionsgate stock.

The transaction also coincides with Icahn on Tuesday launching a $6.50 per-share tender offer for all outstanding shares in the mini-studio.

Lionsgate, which had been carrying around $500 million in debt, said the deleveraging exercise was part of a previously announced plan to reduce its borrowings, and was not related to its resumed war with Icahn, the company's largest shareholder.

The Lionsgate deleveraging move also reduces Icahn's stake in the mini-studio to 33.5%, from 37.8%.

Lionsgate added that its subsidiary Lions Gate Entertainment Inc. completed a private transaction to convert $36 million in 3.625% senior notes due 2025 and $63.7 million in 2.9375% senior notes due 2024 into 16.23 million common shares.

But the Icahn Group in SEC filings Tuesday insisted that the senior notes held by the Lions Gate Entertainment subsidiary will need to be repurchased in the event of a "change of control" at the mini-studio amid Icahn's hostile takeover bid.

Icahn earlier proposed to increase his sway at Lionsgate as its largest shareholder by purchasing $325 million worth of its convertible senior notes.

Rebuffing that overture, Lionsgate in late June also amended its $340 million revolving credit facility from a syndicate led by JP Morgan to raise its "change of control trigger threshold" to over 50% of company shares, in yet another bid to fend off Icahn's battle for control of the mini-studio.
comments powered by Disqus