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Carl Icahn to Sell Entire Lionsgate Stake

30 Aug, 2011 By: Erik Gruenwedel

Carl Icahn

Mercurial investor and minimajor agree to dismiss all outstanding legal claims

Investor Carl Icahn and Lionsgate Aug. 30 said they reached an agreement whereby Icahn will sell his entire stake in the Santa Monica, Calif.-based minimajor.

Lionsgate and Icahn, who owns 34% of the minimajor, also agreed to dismiss all outstanding legal claims.

Icahn, who has a history of investing in companies and then taking on management, had doggedly attempted to wrest control of Lionsgate through stock purchases and unsuccessfully placing representatives, including his son Brett, on the studio’s board.

Under the terms of the deal, Lionsgate purchased 11,040,493 shares of its common stock from Icahn and his son at $7 per share in a transaction to be completed by Sept. 2.

One or more affiliates of MHR Fund Management LLC, an entity controlled by Mark Rachesky, a director of Lionsgate, has purchased an additional 11,040,493 shares of common stock from the Icahns at $7 per share, in a transaction to be completed by Sept. 2.

During the next 35 business days, Lionsgate also will have the right to designate one or more parties to purchase up to 22,080,985 additional shares of common stock from the Icahns at $7 per share.

“We believe that this accretive and anti-dilutive transaction is in the best interests of all shareholders, and it allows the company to continue to focus on the execution of its long-term business plan,” said Lionsgate co-chairman and CEO Jon Feltheimer.

Icahn, in a statement, said it was a good time to sell.

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