lionsgate_logoI’m being told there’s really nothing new with these explanatary conversations. And, anyway, Lionsgate can’t do any kind of deal with MGM unless the studio management brokers some settlement with 32% shareholder Carl Icahn, who has made it clear he won’t approve any big buys by the studio right now. Strange that this is coming on the heels of reports that Spyglass is in the lead to run MGM. (Spyglass Beating Summit To Run MGM?)

Lionsgate management attempted a lowball bid of $1.3B-$1.4B during the MGM auction and then dropped out in March. MgmlogosmallThat’s the last time Lionsgate defied Icahn’s warning not to do any major deals. Among other customary conditions, Icahn’s offer has tightened the reins on Lionsgate not to “enter into any material transaction outside of the ordinary course of business (including any acquisition of assets over $100 million, and any issuance of securities other than upon the exercise of currently outstanding options)”. Though buying MGM would make Lionsgate a bigger player in Hollywood, such an acquisition would add tremendous debt to the studio. And if they gave stock to a seller, then it would dilute Icahn’s stake. Carl wouldn’t be happy about that.

Editor-in-Chief Nikki Finke - tip her here.