Lionsgate Again Rejects Icahn’s Tender Offer3 Aug, 2010 By: Erik Gruenwedel
Like a broken record, Lionsgate’s board of directors has again rejected as insufficient an unsolicited offer from investor Carl Icahn to purchase all issued and outstanding common shares of Lionsgate for $6.50 per share.
The Santa Monica, Calif.-based mini-major’s board, in an Aug. 2 regulatory filing, urged shareholders to reject Icahn’s offer as not being in their best interests and not representing the full value of the studio. It marks at least the third time the board has rejected the investor’s tender offers.
New York-based Icahn and Lionsgate remain embroiled in a contentious tug-of-war over the investor’s hostile takeover attempt of the studio.
Specifically, the board said the offer does not reflect Lionsgate’s expanding film libraries, including, most recently, distribution deals with Newmarket Films, XStreamHD and Francis Ford Coppola’s Zoetrope Corp.
In addition the board said the offer does not adequately account for Lionsgate’s television distribution segment, including 15 shows on 10 different networks, and expansion into domestic and international cable assets and new media platforms such as TV Guide Network, Epix, FearNet, Break Media, and Tiger Gate in China.
Separately, Lionsgate, in the filing, reiterated provisions of a “potential severance and change in control” benefits package that calls for, among other things, that Steve Beeks, president and co-COO, receive severance pay equal up to 50% of his present base salary, or a one-time payment of $1.5 million, in addition to full-vesting of all stock options. Beeks heads the studio's successful home entertainment operations.
Lionsgate shares were down 11 cents per share at $6.61 in mid-morning trading.