The corporate raider, who owns 9.9% of the company’s stock and has lobbied for Netflix to sell itself, has been “supportive,” Chief Creative Officer Ted Sarandos says. “It’s been very positive”, although they haven’t spoken specifically about Netflix’s deal yesterday with Disney. But the exec told the UBS Global Media and Communications Conference that this is no time for Netflix to sell itself. “The growth we’re seeing in the U.S. and the growth we’re seeing in international, we’re just in the beginning. …It’s an amazing cycle of innovation.” Indeed, he asks: “Would there have been HBO Go without Netflix? No way.” Sarandos says that competition is growing but “we never thought we’d run away with the whole sector.” And he says that “there aren’t many direct competitors.” For example, Amazon Prime offers discounts on e-commerce shipping, and Hulu Plus has ads. Netflix recently beefed up its anti-takeover protections to keep Icahn at bay.
The billionaire corporate raider just paid $154.7M for 4,291,066 Netflix shares, he says in an SEC filing. His decision to exercise his call options means he now directly owns 9.98% of the video streaming company — 5,541,066 shares — …
The activist investor is trying to hang a “For Sale” sign on Netflix after he bought stock and options equal to 9.98% of the company. “It would be the mother of all auctions” if Netflix put itself in play, he says. The company’s effort …
Netflix’s new poison pill has riled the legendary corporate raider, who recently bought stock and options equal to 9.98% of the company. Adopting an anti-takeover defense like this without a shareholder vote “is …
The new plan “is intended to protect Netflix and its stockholders” from a takeover effort that the board believes would not “enable all stockholders to realize the long-term value of their investment in Netflix,” the company says this morning. But it adds that the effort would not interfere with a business deal that’s approved by the board. The terms appear to be specifically designed to block corporate raider Carl Icahn, who disclosed last week that he owns stock and options equal to 9.98% of Netflix. It would essentially enable the company to flood the market with shares to dilute any additional purchases he makes. Specifically, Netflix would give those owning stock as of November 2 a collection of rights equal to the number of shares they already own. Each right would give the owner the ability to buy one one-thousandth of a share of a new series of preferred stock at an exercise price of $350 per right. These new rights would become exercisable once an individual (say, Icahn) owns at least 10%, or an institutional investor acquires 20%, of Netflix’s stock without the board’s approval. The rights will expire on November 2, 2015 if they haven’t been redeemed.
Lots of Netflix investors seem to believe that the corporate raider has enough ideas and juice to revive the video rental company, which is struggling to secure its place in the media ecosystem. Shares only retreated 3% since Wednesday, when they popped 13.8% on the startling news that Icahn bought stock and call options that could give him 9.98% of the company. That resulted in widespread speculation that the legendary crusader for shareholder value has a plan to force Netflix to take a new direction following nearly a year and a half period during which Netflix lost 74% of its market value.
Well, if he does, then it will be interesting to see what it is — and how he might prevail if he crosses swords with CEO Reed Hastings. Icahn has fewer options than people think.
Potent anti-takeover provisions in Netflix’s by-laws would make it difficult to wage a hostile effort to take over the board. The company’s staggered elections mean that only a third of the directors are replaced each year. What’s more, Netflix doesn’t allow shareholders to call a special election to pick new directors. If Icahn continues to buy stock, the company can exercise what’s known as a poison pill — a provision that gives the board the right to flood the market with up to 10M preferred shares, diluting the value of his holdings. Corporate law in Delaware, where Netflix is incorporated, also bars companies from combining with a holder of more than 15% of its stock unless the holder has had the shares for at least three years — unless the board approves the transaction.
Netflix shares skyrocketed — +20% at one point in mid-afternoon trading before closing +13.8% — after the billionaire corporate raider disclosed that he recently bought stock and call options that could give him control of 9.98% of the company. Carl Icahn says in an SEC filing that Netflix is “undervalued” and “may hold significant strategic value for a variety of significantly larger companies that are engaging in more direct competition with one another due to the evolution of the internet, mobile, and traditional industry.” Icahn also is “considering ways for [Netflix] to maximize shareholder value.” But he has “reached no conclusion” and “may in the future seek to have discussions” with the company. That’s a loud cannon shot across CEO Reed Hastings‘ bow: Icahn made his name as a so-called corporate raider, buying stock in companies that he considered undervalued and then angling either to take control or change the firm’s strategy to boost the share price.
Lionsgate Vice Chairman Michael Burns had to disappoint analysts who wanted him to open up about the big question of the day for his company: What’s going on with its reported merger talks with Summit Entertainment? “I’m not going to talk about any specific deal,” he said at the UBS Annual Global Media and Communications Conference. He noted, though, that a consolidation of independent film and TV companies is “a natural thing to happen.” He assured the group that Lionsgate is only interested in deals that add to its value, and don’t require it to either issue stock or take on additional debt. “We’re looking to delever, not lever up,” he says.
With that out of the way, he spoke candidly about the company’s plans for next year where he says “you’ll see us steady state for the first time” cranking out about a dozen movies and about three new TV shows. He’s encouraged about a plan to develop a TV series for ABC based on The Lincoln Lawyer – and Charlie Sheen’s Anger Management. ”I’ve known Charlie a long, long time,” Burns said. “Our goal is to keep Charlie working, keep him healthy — and we have a great partner in FX.” Burns says that a series it’s developing for
So much for last week’s breathless reports about how this secondary offering for 19.2M of Carl Icahn’s shares was put “on hold” due to a drop in Lionsgate’s stock price. The deal with Icahn requires Lionsgate to pay him $7 a share, which should then put an end to the billionaire’s effort to control the film and TV company. Lionsgate didn’t want to have to make up the difference if it couldn’t collect that much from this offering. That doesn’t seem to be a problem now; Lionsgate closed yesterday at $7.10.
OK, so how did Icahn fare in this Hollywood drama? Not well. He probably ends up with a slight profit on his Lionsgate stock, which cost him an average of $6.90 a share. But that likely was more than eaten up by the legal bills for his applications to the Securities Commission in British Columbia, the suits he lost in the Canadian province’s Supreme Court and Appeals Court, as well as cases at the New York Supreme Court and District Court. Here’s the announcement of the offering:
Has Lionsgate’s effort to sell 19.2M shares in the company owned by Carl Icahn been put “on hold,” as Reuters reported yesterday? The answer is: sort of, but not exactly. Yes, the company wanted to price the shares this week …
Lionsgate said in a regulatory filing today that Mark Rachesky, the former Carl Icahn protege and the mini-major’s largest shareholder, has been appointed co-chairman of the board, a title he will share with current CEO Jon Feltheimer. The …
SANTA MONICA, CA, and VANCOUVER, BC, August 30, 2011 – Lionsgate (NYSE: LGF) (“the Company”), a leading diversified global entertainment company, announced today that Carl and Brett Icahn have reached an agreement with the Company under which the Icahns have agreed to sell up to 44,161,971 shares of Lionsgate common stock, representing substantially all of the Lionsgate shares currently owned by the Icahns. The parties also agreed to dismiss all outstanding litigation between them and release all claims that they may potentially have against each other.
BREAKING: In a move that ends a protracted hostile takeover attempt, Carl Icahn and Lionsgate have announced that Icahn and his son Brett will sell up to 44,161,971 shares of Lionsgate common stock, which is virtually the entire stake held by the family. Both Lionsgate and Icahn in turn have dropped the various litigation between them. Those shares will be sold for $7, which is below the $7.52 that the stock was worth at the market close today.
Through a series of tender offers that ranged from $6 per share to $7.50, Icahn accumulated a total of 33.2% control of Lionsgate, blasting the company’s management every step of the way as he tried to oust the company’s board. Those shares will fall into the hands of Lionsgate’s largest shareholders in a series of transactions that will take place over the next 35 business days. Right away, Lionsgate has bought 11,040,493 shares for $7 each. Another 11 million shares will be bought by one or more affiliates of MHR Fund Management LLC, which is controlled by Mark H. Rachesky, a Lionsgate director whose moves during the takeover battle helped management keep Icahn from accumulating enough shares to win a proxy battle.