Lionsgate has received a revised unsolicited tender offer from Carl Icahn to acquire up to all of Lionsgate’s outstanding common shares for $7.50 per share in cash, the company announced Tuesday morning.
Icahn's offer is conditioned on Lionsgate to either rescind the company's offer of shares issued to a fund controlled by investor Mark Rachesky, or that these shares are converted to non-voting status.
Icahn separately is seeking remedies from a British Columbia court to alter or invalidate the Rachesky debt-to-equity transaction. The case is scheduled to be heard Oct. 12.
The company said the board will review the offer and make a recommendation to shareholders “promptly.” It recommended shareholders take no action at the present time.
Lionsgate’s board rejected the billionaire investor’s previous unsolicited buyout at $6.50, saying it “not in the best interests of Lionsgate and its shareholders and other stakeholders.” The board “strongly” recommended that shareholders “not tender their shares into the Icahn Group's offer."
Stakeholders have until Oct. 22 to sell their shares. The original deadline was Aug. 25, but it was pushed back earlier this month so that the Supreme Court of British Columbia would have time to hear Icahn's court case.
Lionsgate made the Rachesky deal so the studio could reduce Icahn’s shares and prevent him from obtaining a controlling interest in the company.
Icahn has been engaged in a hostile takeover attempt of the company throughout the spring and summer. He has threatened to fire Lionsgate executive team and force the company into bankruptcy if he takes control.
He has criticized Lionsgate's management team for failing to keep costs down and for a series of box office disappointments such as “Killers” and “Kick-Ass,” though the latter has turned out to be something of a success on home video.
Lionsgate shares were trading up 13 percent at $7.35 after news of the offer broke.
