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Lionsgate Again Rejects Icahn Bid

23 Mar, 2010 By: Erik Gruenwedel

Carl Icahn

As expected, Lionsgate’s board of directors March 23 said it rejected activist investor Carl Icahn’s $6 per share offer to assume control of the Santa Monica, Calif.-based mini-major.

New York-based Icahn March 19 upped his tender offer for all outstanding common shares of Lionsgate, saying he wanted to exert greater shareholder control on catalog acquisitions, including the studio’s reported $1.3 billion bid for MGM’s vaunted film vault.

“We believe that nothing has changed — the offer remains financially inadequate and still does not reflect the full value of Lionsgate shares,” said co-chairman and CEO Jon Feltheimer, in a statement.

Feltheimer reiterated that Icahn was attempting to assume control of the Lionsgate without expressing any forward vision for company or relevant track record of industry experience, other than cutting costs.

Specifically, the board said the $6 per share offer paled in comparison to Wall Street analysts who claim Lionsgate’s target share price this year is 46% higher at $8.76 per share.

Analyst David Miller with Caris & Co., in Los Angeles, said a fair offer was around $9 per share.

The studio reported a loss of $65.5 million in the third quarter (ended Dec. 31), despite the home entertainment segment delivering record revenue from its catalog.

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