Investor Icahn Extends Lionsgate Bid

By : Erik Gruenwedel | Posted: 21 Apr 2009
egruenwedel@questex.com

Activist investor Carl Icahn April 21 extended until May 1 his tender offer to acquire $318 million of Lionsgate’s convertible long-term debt.

Icahn prolonged his offer, which expired April 20, citing efforts by the Santa Monica, Calif.-based mini-major to refinance with select private investors the terms of $66.6 million worth of bond debt.

Those efforts, say analysts, added additional interest payments to the bondholders while delaying full maturation of the debt three years. It also effectively devalued Icahn’s offer.

In a regulatory filing, however, the investor said Lionsgate’s “refinancing exchange agreement” may have just “confused some bondholders,” and therefore necessitated an extension.

Icahn owns 14.5% of the Santa Monica, Calif.-based mini-major’s stock, making the New York-based investor the third largest shareholder.

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