Editor-in-Chief Nikki Finke - tip her here.
Another day, another brawl between Lionsgate and its biggest shareholder Carl Icahn as he attempts a hostile takeover of the studio. Today, he gave an interview to Dow Jones newswire saying he wouldn’t rule out supporting a merger between Lionsgate and MGM but slamming the benefit to shareholders of a deal between them. ”I’ve found in my investment career that it’s very difficult but not impossible to cure one problem you have by taking on a second problem,” said Icahn, noting that film libraries are under pressure due to uncertainty about the future of the DVD sales business, which is in decline. ”This is analogous to a couple that is having a lot of problems paying the mortgage on a relatively small house,” Icahn added. “Instead of focusing on taking care of those problems, they’re out negotiating to buy a big mansion down the street that’s rumored to be haunted.” On another front, Icahn says Lionsgate shares are now “artificially overvalued” as the stock price rose to $7.27 today, well above his tender offer of $7 a share, because the studio was being added to the Russell 2000 index at the close of trading. Liosngate insiders insist the the studio’s June 1st reporting of its better-than-expected performance (70% higher than its initial guidance) is the reason for the higher stock price.
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