The sharp elbowing between Lionsgate and Carl Icahn takes another turn in the courtroom. The Wall Street Journal reports that Lionsgate filed in court to force Icahn to disclose any confidential merger agreements he made with MGM. This continues Lionsgate’s assertion that Icahn was pushing for a merge between Lionsgate and MGM while lambasting Lionsgate management for exploring the same scenario. Lionsgate’s desire for transparency extended to an ask that Icahn fess up about a side deal he might have made with Mark Cuban to sell his stake. That info–which reportedly came from Girls Gone Wild kingpin Joe Francis–was refuted by Cuban, who told WSJ that if there was any questionable offer involved in the equation, it came when Lionsgate co-chairman Michael Burns made a third-party offer to buy his shares for more than whatever Icahn was willing to pay…
Christopher Tierney, the 31-year old actor/dancer who fell 30 feet and was badly hurt in a preview performance of Broadway’s Spider-Man: Turn Off The Dark, gave his first interview last night to Gotham’s WCBS-TV local news. Watch below as he describes an ordeal that included the following inventory of broken bones: 4 ribs, 3 vertebra, scapula, elbow, and the back of his head. It’s good to see Tierney moving around and even enthused about possibly returning to the show. But how’s that dancer’s body, full of screws and rods, going … Read More »
BREAKING: In the latest development in Carl Icahn’s attempt to take over Lionsgate and merge its assets with MGM, a Supreme Court judge in British Columbia has dismissed Icahn’s lawsuit to thwart a Lionsgate de-leveraging move on July 20 that took $100 million in debt off the books and converted it into equity, which was bought by shareholder John Kornitzer, who is loyal to the existing Lionsgate brass. In a separate third party transaction, Kornitzer sold those shares to Mark Rachesky, who is on the Lionsgate board and firmly behind current management. That move pushed Icahn’s 38% stake in the company back to 33.5%, and increase Rachesky’s stake from 19% to 29%. Icahn can still gain more shares, as his $7.50 per share tender offer has been extended until November 12. But his 33.5% stake isn’t enough to win a proxy fight.
2ND UPDATE: MGM has just issued this statement about the results of the creditor voting:
“Metro-Goldwyn-Mayer Inc. (‘MGM’) today announced that the secured lenders voting in the Company’s solicitation process have overwhelmingly approved its proposed plan of reorganization (‘Plan’). MGM will now move expeditiously to implement that Plan, which will dramatically reduce its debt load and put the Company in a strong position to execute its business strategy. MGM is appreciative of the lenders’ support.”
UPDATE: The creditors have now officially approved the restructuring plan that puts the Spyglass chiefs atop MGM and gets the studio moving again. A statement will be released momentarily. Now, the fun begins. If MGM isn’t a distributor, the next installment of James Bond will be a jump ball. Expect Sony (which distributed Casino Royale to battle it out with Warner Bros and Fox, but watch Paramount emerge in the thick of it because of the close relationship that the studio has developed with Spyglass since that company became co-financier of Star Trek and the followup that is in the works. Read More »
Calling the proposed Spyglass plan a “presciption for disaster,” Carl Icahn on Thursday offered to buy another $963 million of MGM’s debt. He already owns around $500 million of it, so the sum would make him one of MGM’s largest creditors – with a stake of around 37%. Pending the offer, he would then be in a good position to approve a merger between Lionsgate and the studio, one he now supports. Some of MGM’s creditors are pushing hard for that prepackaged bankruptcy plan that would instead see Spyglass’ Gary Barber and Roger Birnbaum come in and run the studio. As a condition of his offer, Icahn said anyone selling to him must vote against the Spyglass plan; a vote is scheduled for Oct. 29. Icahn also stated on Thursday: “This is the critical decision point for MGM lenders, yet we are being rushed into an extraordinary Prepackaged Plan with limited information and input, on a “hurry up basis” that frustrates any dissent. I hope to defeat this “rush to judgment.”
Below is Carl Icahn’s statement from this morning expressing his support for a proposed Lionsgate/MGM merger. Late Monday, Lionsgate sent a proposal to MGM expressing support of a ”business combination” after what it called “detailed” discussions with Icahn. All of this after rebuffing Icahn’s attempts for so long. This latest development comes just days after MGM said it was planning a merger with Spyglass wherein Gary Barber and Roger Birnbaum would be the new bosses.
“We are holders of significant positions in both Lions Gate stock and MGM debt. Today, Lions Gate has made a proposal to combine these two companies. We believe that this combination of Lions Gate and MGM would enhance value for all constituencies and we believe this proposal as submitted is far better for MGM holders than the current proposal to combine MGM with Spyglass. In addition, we also believe such a combination transaction would enhance the value of Lions Gate shares. However, we intend to continue to pursue our lawsuits regarding Lions Gate’s recent dilutive transaction with Mark Rachesky. Whether or not we prevail in those lawsuits, we intend to continue to support a combination of Lions Gate and MGM. Our support for this combination is conditioned on the combined company having satisfactory corporate governance provisions.”