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Lionsgate Reveals Board Vote vs Carl Icahn

Mike Fleming

SANTA MONICA, Calif. and VANCOUVER, B.C. — December 16, 2010 — Lionsgate announced today that IVS Associates, Inc., the independent Inspector of Elections, has released its preliminary report for Lionsgate’s 2010 Annual General Meeting of Shareholders held on December 14, 2010.

Based on the preliminary tabulation by IVS Associates, Lionsgate shareholders have elected to the Lionsgate Board of Directors all twelve of the Company’s director nominees by a clear and convincing margin: Norman Bacal, Michael Burns, Arthur Evrensel, Jon Feltheimer, Frank Giustra, Morley Koffman, Harald Ludwig, G. Scott Paterson, Mark H. Rachesky, Daryl Simm, Hardwick Simmons and
Phyllis Yaffe.

Lionsgate issued the following statement:
“These results are a clear indication that Lionsgate shareholders understand our vision for Lionsgate and the tremendous potential for continued value creation under this Board and management team.
With the right leadership in place, Lionsgate is focused on continuing to build on the momentum over the last year, in which we achieved record results across our business.  We thank our shareholders for their strong support throughout this process and we look forward to continuing to execute on our strategy for the benefit of all shareholders.”
With 93.92% of the total eligible shares voted, the results as a percentage of shares voted on directors are as follows:

Prior to the closing of the polls at the Annual General Meeting, all proxy cards received by the Company and the Icahn Group were turned

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Lionsgate Keeps Icahn Out Of Board Room; UPDATE: Carl Vows Fight To “Save Studio”

Mike Fleming

UPDATE 1:30 PM: Carl Icahn released the following reaction to Lionsgate shareholders today re-electing current Lionsgate management’s board of directors and not his own proposed 5 directors. from the sound of it, Icahn has zero intention of giving up:

We are disappointed that shareholder democracy has failed – or rather was subverted – in the case of Lions Gate’s annual meeting of shareholders as a result of the voting of over 16 million shares that were issued to director Mark Rachesky at a bargain price in a transaction approved by Lions Gate’s board of directors “at a midnight meeting” in July in an effort to entrench themselves. It is clear to us from our analysis of the preliminary voting results that had this dilutive transaction been rescinded, as we had requested of courts in New York and Canada, our slate of nominees would have been elected.

This whole situation is a very sad commentary on the state of corporate governance today. The biggest losers are the shareholders of Lions Gate who were deprived, as a result of the machinations of Lions Gate’s board and senior management, of the opportunity to receive a large premium for their shares in our tender offer. Unfortunately, shareholders might be in for even more pain. The shares have already lost more than 8% of their value since December 8, 2010, the day before the New York Supreme Court denied our motion for a preliminary injunction regarding the dilutive

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After Legal Setbacks, Carl Icahn Lets Lionsgate Tender Offer Expire

Mike Fleming

Carl C. Icahn announced today that the offer by his affiliated entities to purchase any and all of the outstanding common shares of Lions Gate Entertainment Corp. for $7.50 per share in cash has expired. The offer had been conditioned upon the New York State Supreme Court granting, by 11:59 p.m., Vancouver time, on December 10, 2010, the Icahn Group’s motion for a preliminary injunction preventing the Lions Gate common shares issued on July 20, 2010 to a fund controlled by director Mark Rachesky from being voted at the 2010 annual general meeting of Lions Gate shareholders. This condition was not met. As a result, Mr. Icahn and his affiliated entities will not purchase any of the Lions Gate common shares that were tendered in the offer. All Lions Gate common shares that were previously tendered and not withdrawn will be returned promptly.

Mr. Icahn stated: “We are disappointed that our motion for a preliminary injunction barring the voting of the shares issued to director Mark Rachesky was not granted, but we are pleased that the judge agreed to hold a full trial on the matter within the next several months and will require Lions Gate to hold a meeting of shareholders again in September 2011 following his ruling in the case. We will continue to monitor the situation at Lions Gate and will aggressively take all actions necessary to protect our investment, and we reserve all of our rights with respect to Lions Gate and its securities. We are

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Carl Icahn Extends Lionsgate Share Offer

Mike Fleming

Though Carl Icahn’s attempt to take control of Lionsgate was dealt a setback recently by a Supreme Court judge in British Columbia who dismissed Icahn’s lawsuit to stop a Lionsgate de-leveraging move that pushed his 38% stake down to 33.5%, Icahn is still trying. He’s extended his $7.50 per share offer, which had already been extended to November 12. All this is going on as MGM announced that it is speeding toward approval of its prepackaged bankruptcy, with Spyglass partners Roger Birnbaum and Gary Barber at the helm. Icahn, a significant holder of MGM debt, is in the middle of that, too, and there’s every indication there might be an alignment of Lionsgate and MGM, with Icahn playing a role. Here’s the announcement Icahn just made:

NEW YORK, Nov. 12, 2010– Carl C. Icahn announced today that the offer by his affiliated entities to purchase up to all of the outstanding common shares of Lions Gate Entertainment Corp. for $7.50 per share in cash has been extended and will now expire at 11:59 p.m., Vancouver time, on November 22, 2010, unless further extended or withdrawn.

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Lionsgate Nixes Icahn’s $6.50 Share Offer

No surprise. Lionsgate announced today its Board of Directors who were present voted unanimously reject Carl Icahn’s $6.50 a share tender offer for all outstanding common stock in the film/TV studio.

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Lionsgate Suddenly Dilutes Icahn Holdings

Ceasefire Ends; Lionsgate Ponders Icahn’s $6.50 A Share Bid

So now Carl Icahn owns only 33.5% of the film and TV studio, and not the 37.9% he had as of yesterday. Nasty, nasty, nasty. Though it is interesting to see these two camps whack at each other as Icahn tries for a hostile takeover. Here’s how Lionsgate described what it did today:

SANTA MONICA, Calif., and VANCOUVER, British Columbia, July 20, 2010 – Lions Gate Entertainment Corp. (NYSE: LGF) (the “Company”) announced that today it had completed a deleveraging transaction in which approximately $100 million of its senior subordinated notes were converted into common shares at an effective conversion price of $6.20 per share. The conversion price represented a 2.8% premium to Monday’s closing price of the Company’s common stock.

The transaction is a key part of the Company’s previously announced plan to reduce its total debt, as well as its nearer term maturities.

The transaction was effected by the Company’s wholly owned subsidiary Lions Gate Entertainment Inc. (“LGEI”) pursuant to the exchange of $36,009,000 in aggregate principal amount of its 3.625% Convertible Senior Subordinated Notes due 2025 and $63,709,000 in aggregate principal amount of 2.9375% Convertible Senior Subordinated Notes due 2024 in a private transaction. The notes were exchanged for new notes which were identical to the old notes but had an extended maturity date and extended put rights by two years and were immediately convertible at an initial

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IT’S WAR AGAIN: As 10-Day Ceasefire Ends, Lionsgate Ponders Icahn’s $6.50 Share Bid

Mike Fleming

UPDATED: What came out of the 10-day cease fire between Carl Icahn and Lionsgate management? An offer by Icahn to buy the company for $6.50 a share. Considering that Icahn acquired over 30% of the company by offering $7 per share — Lionsgate management called that sum inadequate and urged shareholders to reject it — it seems unlikely this will lead to a deal.

Icahn’s firm said today there were no immediate opportunities that justified extending the “standstill period,” though it said discussions about a potential acquisition may continue in the future. Icahn’s side also reiterated that it intends to replace all or most of Lionsgate’s board of directors. The firm said recent actions taken by the company, like its adoption of a second poison pill measure after a previous one was struck down by Canadian regulators, convinced the firm that “it is extremely unlikely that the current management and board of directors of Lionsgate will allow shareholders of Lionsgate to make their own determination on the future path of the company, including decisions to make a major acquisition.”

Here’s the release just issued by Lionsgate and Icahn’s statement:

SANTA MONICA, CA, and VANCOUVER, BC, July 20, 2010 — Lionsgate today announced that it has received an unsolicited tender offer from Carl Icahn to acquire up to all of the common shares of Lionsgate for US$6.50 per share in cash. The offer is scheduled to expire at 8:00 p.m., New York City time, on August 25, 2010, unless extended or

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Lionsgate & Icahn Agree To 10-Day Ceasefire

lionsgate2_logoBREAKING NEWS! UPDATE: Today, Lionsgate Entertainment filed Form 8-K paperwork with the SEC that it has entered into a “Material Definitive Agreement” with Carl Icahn agreeing ”to work together on certain acquisition opportunities beginning on July 9, 2010 and ending on July 19, 2010″. Icahn has been leading a hostile takeover of the movie/TV studio and now owns 37.9% of Lionsgate which he’d like to buy for his son Brett to run. But Lionsgate is moving to cap Icahn’s shares at 38%. So today’s ceasefire announcement was surprising. However, Lionsgate insiders tell us that this is, at best, a temporary halt to the long battle for the studio. Lionsgate recently stepped up merger talks with MGM. Here is the letter just filed with the SEC:

Mr. Carl C. Icahn

Gentlemen:
Each of Lions Gate Entertainment Corp. and its subsidiaries (“Lions Gate”) and Carl C. Icahn and his affiliates (“Icahn”) hereby agree that, beginning today and ending at midnight, New York City time, on July 19, 2010 (the “End Date”), Icahn and Lions Gate will work together on certain acquisition
opportunities.

Lions Gate hereby agrees that, beginning today and ending on the End Date, it will not: (i) issue, agree to issue, or authorize or propose the issuance of, any securities to, or enter into any agreement, contract or understanding outside the ordinary course of business with, any member of its board of
directors or their affiliates; (ii) engage in active negotiations for

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Can Lionsgate Cap Icahn Shares At 38%?

feltheimer-200Welcome to the real-life game of Survivor: Wall Street. Lionsgate management tonight is trying to outwit, outplay, and outlast Carl Icahn before he effects a hostile takeover of the movie/TV studio for his son Brett. Lionsgate tonight announced it’s putting into place a “Shareholder Rights Plan” — i.e. a poison pill defense — to cap Icahn at 38% of its stock (he is currently at 37.9%) so he can’t do a “creeping bid” through open market purchases like he did today or private market transactions. ”If he wants control of the Company, he should make a bid that is fair to all shareholders along the lines of a permitted bid described in the press release below,” a studio insider tells me.

icahn200Today, Icahn’s stake rose to 37.9%, or 44.8M shares, of Lionsgate. With 12+% more stock, he can become its majority stockholder. And then Lionsgate’s 12-member board, and the studio’s management team of Jon Feltheimer and Michael Burns, all have a target on their backs. Icahn’s $7 a share tender offer expired at midnight Wednesday, and left him with a 33.9% stake in Lionsgate. (Icahn Now Owns 33.9% Of Lionsgate) Today, he acquired an additional 4% more of the company by buying on the open market. Lionsgate’s immediate reaction was effectively to enact a poison pill defense. But it enacted a poison pill months ago — to prevent Icahn from accumulating over 20% of Lionsgate stock through his tender offer — and Canadian regulators nixed that measure. Can that happen again?

Here is tonight’s Lionsgate statement:

lionsgate-logoSANTA MONICA, Calif., and VANCOUVER, British Columbia, July 1, 2010 — Lionsgate (the “Company”) today announced that its Board of Directors has adopted a Shareholder Rights Plan that is designed to encourage the fair and equal treatment of Lionsgate’s shareholders in connection with any initiative to acquire effective control of the Company.

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Carl Icahn Now Owns 33.9% Of Lionsgate

icahn lgThe studio sees the glass as half full, putting out a statement that “66% of Lionsgate stockholders support management and rejected Carl Icahn’s $7-a-share tender offer. But after that offer expired last night, Carl Icahn now owns 33.9% of the Santa Monica movie and television studio which he’s been attempting to control for his son Brett through a hostile takeover. I’ve already reported that Lionsgate Vice Chairman Michael Burns flew to NYC last week to break bread with Icahn and discuss, among many topics, Lionsgate’s merger talks with MGM. But the rehetoric from both sides remains nasty. So can a negotiated settlement be reached before Icahn starts that promised expensive proxy fight prior to the studio’s annual shareolders meeting this September? the next news may well be Icahn’s announcement of a full slate of directors to replace Lionsgate’s board. here’s Lionsgate’s statement today:

At the completion of the Icahn Group’s offer, holders of over 66% of Lionsgate shares have rejected the Icahn Group’s offer, with only 2.1% of the outstanding shares being tendered into the offer during the subsequent offering period.

We want to take this opportunity to thank our shareholders. Lionsgate’s shareholders have repeatedly confirmed their support for the Board and management’s strategy to grow shareholder value by continuously rejecting the Icahn Group’s financially inadequate offer.

Our focus continues to be running the business to build value for all of our shareholders. As reflected in our strong fiscal 2010 results,

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Lionsgate Reworks Terms With JP Morgan To Keep Cash Flowing (As Long As Studio, And Not Icahn, Controls 50% Of Shares)

By | Tuesday June 22, 2010 @ 6:42am PDT
Mike Fleming

lionsgate-logoCarl Icahn surprised almost everybody when he completed his $7 per share tender offer deadline with control of 32% of Lionsgate, shares.  Hollywood immediately feared the indie studio would be unable to continue business as usual, because Lionsgate’s $340 million credit facility with JP Morgan Chase Bank contained a covenant that allowed the lender could revoke the credit line once an outsider accrued more than 20% of shares in a takeover bid. Today, Lionsgate announced that it has amended its revolving credit facility with JP Morgan Chase. The trigger threshold for Change of Control has been upped from 20% to 50% control or ownership of the Company’s equity securities. This gives Lionsgate brass the ability to spending money while the Icahn Group takeover attempt plays out. The company notes that it keeps the same interest rate it had before, which is 2.5% above the standard bank borrowing rate (which is currently around 1.175%).

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