Studio: “Carl Icahn has no coherent strategy for the company”
SEE RELATED: Carl Icahn Arrives at Deadline With 31% of Lionsgate
Lionsgate announced on Thursday that its shareholders have rejected the Icahn Group’s latest offer to take over the company.
"Once again, Lionsgate’s shareholders have spoken," the studio said in a statement. "The vast majority of our shareholders have yet again demonstrated that they are serious about protecting the value of their investment in Lionsgate."
Holders representing 68 percent of Lionsgate shares rejected Icahn’s $7-per-share offer that was set to expire on Wednesday at 8 p.m., Lionsgate said. However, 13.2 percent of Lionsgate’s outstanding shares were tendered, the studio said.
Those shares, which include 5.4 percent tendered by Mark Cuban, would bring Icahn’s ownership up to about 32 percent, up from the 19 percent he started with before his takeover attempt began in earnest.
Icahn’s position becomes substantially stronger at that level, but he’ll still have to wage a proxy fight for full control of the independent mini-major. It also falls short of the 33 percent he needed to exert internal control, such as vetoing acquisitions and mergers.
Here’s Lionsgate’s full statement:
Once again, Lionsgate’s shareholders have spoken in support of the Board and management’s strategy to create value. Holders of over 68% of Lionsgate shares have rejected the Icahn Group’s offer, with only 13.2% of the outstanding shares being tendered into the offer at its expiry.
Four months have passed since the Icahn Group announced its intention to make a tender offer, and after repeated extensions, numerous changes to its tender offer and a barrage of unwarranted attacks on the Company, including personal attacks on the Board and management, the Icahn Group remains a minority shareholder. We at Lionsgate want to take this opportunity to thank our shareholders for their continued support.
The vast majority of our shareholders have yet again demonstrated that they are serious about protecting the value of their investment in Lionsgate.
With respect to the Company’s credit facilities, Lionsgate is in advanced discussions with its lenders regarding finalization of a waiver or amendment that will prevent the potential event of default that could otherwise result from the Icahn Group’s actions. Based on conversations to date, Lionsgate is highly confident that it will obtain that waiver or amendment shortly.
Our fiscal 2010 results demonstrate that Lionsgate is a company poised to deliver exceptional value to our shareholders from the portfolio of assets we have been building. The strength of our library continues to grow, our home entertainment business remains strong, our TV business has one of the highest success rates in the industry from pilot to full series pickup, we have the beginnings of a tremendous channel platform, we’ve built a diversified portfolio of businesses and our feature films continue to be the main driver. The conclusion is simple and clear: our plan is working, our business is on track and we expect to continue to build our world class media platform.
Conversely, Carl Icahn has no coherent strategy for the Company. His failures at Blockbuster and his former film distribution company, Stratosphere, show that he does not understand the media space. He is looking to seize control of Lionsgate with a financially inadequate, coercive and opportunistic bid. Do not transfer the value of your investment in Lionsgate’s future to Carl Icahn.
We remain confident that Carl Icahn will not obtain control of Lionsgate through its tender offer. Lionsgate urges shareholders to protect the value of their investment and continue to reject the Icahn Group’s inadequate offer by NOT tendering their shares during the subsequent offering period, which expires on June 30, 2010 at 11:59 p.m. New York City time.
Ultimately, Carl Icahn’s inflammatory rhetoric cannot obscure two simple facts: the Icahn Group’s U.S.$7.00 a share offer remains financially inadequate; and our shareholders continue to reject the offer and Carl Icahn’s attempts to seize control of the Company.