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Lionsgate Shareholders Again Reject Icahn Offer

17 Jun, 2010 By: Erik Gruenwedel

Carl Icahn

Lionsgate June 17 said more than 68% of its shareholders declined to take up activist stakeholder Carl Icahn’s $7 per share tender offer. Another 13.2% of shareholders accepted the offer, upping the investor’s stake to 31.8%.

“The vast majority of our shareholders have yet again demonstrated that they are serious about protecting the value of their investment in Lionsgate,” the studio said, in a statement.

In the four months since Icahn offered to acquire all outstanding common shares of the Santa Monica, Calif.-based mini-major, the unsolicited takeover attempt has prompted contentious rhetoric, barbs and accusations from both sides. Indeed, Icahn has said an increase in his minority stake could initiate a series of automated triggers resulting in Lionsgate being on the hook to repay a $472 million bond debt.

Lionsgate said it is in advanced discussions with lenders regarding finalization of a waiver or amendment that will prevent the potential event of default that could otherwise result from Icahn’s actions.

“Based on conversations to date, Lionsgate is highly confident that it will obtain that waiver or amendment shortly,” the studio said in a statement.

Icahn said he remained concerned regarding Lionsgate’s ability to acquire a waiver in the current credit market.

“As we have stated before, we believe the directors have only themselves to blame for the predicament in which Lionsgate now finds itself, as they were the ones who agreed to the offensive ‘poison put’ provisions in the company’s debt documents (which we consider to be entrenchment devices),” Icahn said, in a statement.

The New York-based investor said he was pleased with the results of the tender offer and has extended the commencement period to June 30 to allow shareholders that did not tender shares an opportunity to do so. Analyst David Miller with Caris & Co. in Los Angeles has stated that a fair price for Lionsgate is around $9 per share.

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