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Icahn Ups Lionsgate Stake, Again

8 Jun, 2009 By: Erik Gruenwedel

lionsgate carl icahn

Billionaire activist investor Carl Icahn upped his ownership stake in Lionsgate to 15.6%, from 14.5%, after acquiring more than 1.3 million shares of common stock between June 3 and June 5 at share prices ranging from $5.36 to $5.46, according to a regulatory filing.

Analysts contend Icahn’s actions are typical of his operational style, which both supports current management while at the same time turning the screws on them.

Icahn, who is a board member of Blockbuster Inc., quietly purchased stock in the Santa Monica, Calif.-based mini-major in May and June while at the same time waging a fiscal public battle to exert greater influence.

He has been highly critical of Lionsgate’s overhead costs (including 450 employees) after it lost $93.4 million in the third quarter (and $28.6 million in the fourth quarter) and lambasted management for recently acquiring the TV Guide cable channel for $255 million, among other complaints.

The studio subsequently sold a 49% stake in TV Guide channel for $123 million.

In April Icahn entered a tender offer to bondholders to acquire Lionsgate’s $316 million in convertible debt (which can be converted into company stock) with little reaction — less than $9 million of the debt was sold.

In March Icahn unsuccessfully attempted to wrest two seats on Lionsgate’s board.

David Miller, analyst with Caris & Co. in Los Angeles, believes ongoing scuttlebutt concerning tensions between the investor and Lionsgate is grist for the media.

“That’s what the media wants to write about,” Miller said recently. “It’s the sexy story.”

New York-based Icahn was not immediately available for comment. 

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