Icahn ups offer, now wants to buy all of Lionsgate

Billionaire corporate raider makes bold play for studio.

By TheWrap Mar 19, 2010 1:43PM

Billionaire corporate raider Carl Icahn has upped his offer to buy Lions Gate Entertainment (LGF), offering to acquire all of the studio’s outstanding shares.


"The Icahn Group is now offering to purchase UP TO ALL of Lionsgate's outstanding common shares. In addition, the expiration date of the Offer has been extended to April 30, 2010," he said in a news release.


The offer comes on the very day that Lionsgate is poised to bid in the final round of the expected sale of MGM, a deal that Icahn opposes. Lionsgate has been struggling with what price to set for the debt-laden MGM, and is bidding against better-funded and larger rivals, Time-Warner and Access Industries.



Last week, Lionsgate rejected Icahn’s offer to acquire 13.2 million shares -- about 30% of Lions Gate -- for $6 per share, or nearly $80 million.


Lionsgate said Icahn’s offer was 28.5% less than what Wall Street analysts have said its shares are worth. Shares of Lions Gate stock were trading at $6.00 Friday morning, up about 0.5%.


Meanwhile, it was not entirely clear what strategy Icahn was pursuing, and why he felt shareholders that did not sell to him previously would now do so. He currently owns 18.9%, and has sought seats on the board, which so far Lions Gate has not granted him.


Lionsgate has proposed that its shareholders adopt a defensive rights plan, or poison pill, to keep Icahn from accumulating shares. Reuters reported  that Icahn said on Friday that he intended to pursue legal action against Lions Gate's poison pill. If his offer is successful, his company, the Icahn Group, would replace the studio's board of directors with its own nominees, he said.


In rejecting Icahn's earlier offer, Lionsgate said that “The Icahn Group has limited experience in operating a business in Lionsgate’s industry,” the studio said.  “Despite this, the Icahn Group is seeking a greater opportunity to participate in decisions regarding major acquisitions and other matters that would affect shareholders.”


Lions Gate called Icahn’s partial bid “inherently coercive to other shareholders.”


Read more at TheWrap.


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