The activist shareholder tries again to get more traction inside the company
Update on March 1:
Lionsgate has issued a statement that it will review Carl Icahn's offer and inform shareholders afterward. The statement issued:
"Lionsgate’s Board of Directors will review Mr. Icahn’s proposal and will make its recommendation to shareholders promptly. The Board of Directors’ recommendation will be included in a Solicitation/Recommendation Statement filing on Schedule 14D-9. Lionsgate noted that there is no need for shareholders to take any action at this time.
Carl Icahn is at it again.
Last March he tried to maneuver himself into a controlling position in Lionsgate by buying up $325 million in debt. That didn’t work out.
Now he’s trying to maneuver himself into a controlling position in Liongate by buying up stock at $6 a share. That’s not terribly much more than the $5.50 or so that the stock is trading at on the NY Stock Exchange.
Clearly, the old takeover tiger still wants a seat at the table, and he’s frustrated that he can’t get it.
When we last left this story six months ago, Lionsgate management were talking to Icahn about his desire for a couple of seats on the Lionsgate board. Those talks broke down, twice. Then came the debt move, but CEO Jon Feltheimer successfully boxed in the investor by getting the public support of other key stakeholders.
Lately Icahn – who owns 14.5 percent of the independent studio – is probably disturbed by the backroom chatter over Lionsgate bidding on MGM – a $1.5 billion deal – and potentially dipping into the Disney bidding for Miramax.
He doesn’t like the fact that he has no say in these purchases – hence the stock move.
Lionsgate seems unworried. "If the price is anywhere near 6, no one will tender. It's not a big enough premium," said one person close to the company.
Lionsgate is in a stronger position than it was last year, though it's stock is not appreciably up. The studio found a partner on the TV Guide purchase, Epix — the online streaming initative – is gaining traction and its movies are tracking.
Lionsgate has successfully controlled Icahn until now, but if he buys not much more stock they may end up having to give him a seat on the board. As this last move demonstrates, the old activist is not in the habit of giving up easily.
See previous: Carl Icahn Makes a Play for 30% Stake in Lionsgate