Lionsgate Denounces Icahn’s Board Slate8 Dec, 2010 By: Erik Gruenwedel
In a Dec. 8 letter to shareholders, Lionsgate’s board criticized a slate of prospective board members activist shareholder Carl Icahn wants elected at the Dec. 14 annual shareholder meeting.
Icahn, who owns more than a third of the Santa Monica, Calif.-based minimajor’s shares, is attempting a hostile takeover through a $7.50 per share offer for outstanding common shares.
Lionsgate said Icahn’s slate — which includes studio executive Chris McGurk, most recently with Overture Films; Jay Firestone of Firestone Entertainment; Michael Dornemann, a former Take-Two board member; Daniel Ninivaggi; and Harold Shapiro — lack the relevant media experience necessary to oversee a studio.
In addition, Lionsgate characterized Icahn as having a “frightening record” of destroyed shareholder value, underscored by allegations that an investment of $1 in a company whose board included Icahn reps would have produced a value of just 18 cents after 10 years.
The studio said Icahn in the ’90s owned a movie distribution company, Stratosphere Entertainment, which promised returns from $3 million to $30 million on releases; yet generated a combined $7 million on 12 movies.
Stratosphere went out of business in 2000.
“Now, is certainly not the time to make changes,” Lionsgate wrote in the letter.