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: Read More »
Lionsgate has sued its biggest shareholder Carl Icahn, claiming he publicly opposed a merger between the company and MGM then gummed up the process until he could profit substantially from a potential marriage. Lionsgate claims Icahn publicly said he would oppose the merger, only to turn around and secretly buy up a large stake in MGM’s debt…and then push for the merger. ”It turns out that Icahn was misleading Lionsgate and its shareholders all along,” the lawsuit, filed in New York, says. And that “recent developments indicate he was playing a double game. Icahn opposed a merger not because it was bad for Lionsgate but because it was good – so good in fact that he wanted to postpone it until he could buy up as much of both companies as he could.” The suit also says that, “While urging Lionsgate shareholders to support his takeover campaign to ensure that Lionsgate did not pursue what he called a ‘delusional’ MGM transaction, Icahn was quietly amassing a huge position in MGM debt with the undisclosed intention of reaping profits from both sides in an eventual merger.” All of this comes one day before the voting deadline on a proposed prepackaged bankruptcy plan that would see Spyglass Entertainment’s Gary Barber and Roger Birnbaum take over the studio. Just this week, Icahn redoubled his efforts to buy up even more MGM debt in preparation for a Lionsgate merger, so the big unknown is how any … Read More »
Every Icahn move has deep reverberations inside the film/television studio whose management is increasingly paranoid about how their actions will be viewed by him. What a destabilizing situation. Now Carl Icahn’s hostile takeover attempt intensifies with his $7.50 a share unsolicited tender offer this morning. It expires October 22nd. Icahn said his new offer will only be valid if the extra shares that the company recently issued to Lionsgate director Mark Rachesky (who used to be Icahn’s investment adviser) are rescinded or converted into nonvoting stock. The film/TV mini-major, in a defensive move against Icahn, did a debt-for-equity swap in July to dilute his stake in the company. It issued 16.2 million new common shares to Rachesky, boosting his stake to 28.9%, while diluting Icahn’s stake to 33.5% from 37.9%.
Icahn has asked the Supreme Court of British Columbia to reverse the swap. Lionsgate told me just now that its annual shareholders meeting, usually scheduled for sometime in September, has been postponed until after October 12th. “The British Columbia Supreme Court, which is hearing Icahn’s litigation, asked us to delay the record date for the Annual Shareholders Meeting until after their October 12 hearing,” a source told me.
Here is Lionsgate’s response to Icahn’s new tender offer:
SANTA MONICA, Calif. and VANCOUVER, August 31, 2010 — Lionsgate today announced that it has received a revised unsolicited tender offer from Carl Icahn and certain of his affiliated entities (the “Icahn Group”) to acquire up to all of Lionsgate’s
… Read More »