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Lionsgate Urges Shareholders to Reject Latest Icahn Offer

21 Apr, 2010 By: Erik Gruenwedel

As expected, Lionsgate April 21 said its board of directors has determined that activist investor Carl Icahn’s revised hostile $7 per share tender offer for the Santa Monica, Calif.-based mini-major is financially inadequate.

Icahn, who owns about 14% of Lionsgate’s common stock, earlier this month increased his unsolicited bid for the studio to $7 per share — up nearly 17% from his previous offer of $6 per share.

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

Lionsgate, which will hold a special meeting May 4 to vote on a “shareholders rights plan,” characterized Icahn’s offer as opportunistic and coercive.

“We believe that the Icahn Group’s offer… does not reflect the full value of Lionsgate shares,” said CEO Jon Feltheimer, in a statement. “We believe that the offer pales in comparison to the value inherent in the world class platform we have established over the past 10 years.”

Lionsgate 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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