Reports: Icahn Ups Lionsgate Scrutiny9 Mar, 2009 By: Erik Gruenwedel
Billionaire investor Carl Icahn has reportedly partnered with Lionsgate’s largest single investor in an attempt to wrest board seats and exert greater influence on the Santa Monica, Calif.-based mini-major’s operations.
Icahn, whose representatives occupy board seats at Blockbuster and Time Warner, among others, is looking to grab at least two seats on Lionsgate’s 12-member board, according to Reuters. To achieve this, he has cozied up to Mark Rachesky, whose MHR Fund Management holds 19.4% of the studio’s more than 115 million shares.
Analysts say Icahn’s actions are typical of his operational style that both supports current management while at the same time turning the screws on them.
Doug Creutz, analyst with Cowen & Co. in New York, said Icahn is “clearly seeking a larger say” in the mini-major’s direction.
“[This] is understandable given his increasing financial stake,” Creutz wrote in a research note.
David Miller, analyst with Caris & Co. in Los Angeles, didn’t dispute the allegation Icahn was looking for board representation. He did say ongoing scuttlebutt concerning tensions between the investor and Lionsgate is grist for the media.
“That’s what the media wants to write about,” Miller said recently. “It’s the sexy story.”
Lionsgate lost more than $94 million in the most recent quarter.
Representatives from Lionsgate and Icahn’s New York office were not immediately available for comment.