Lionsgate Entertainment's board of directors on Wednesday recommended that company shareholders reject activist investor Carl Icahn's latest tender offer, which has risen to $7.50 a share from a starting price of $6.50 back in July.
In a filing with the Securities and Exchange Commission, Lionsgate officials said that Icahn's offer doesn't reflect the full value of the company and criticized the bid's conditions.
One of those conditions — included in the offer Icahn tendered last week — required that Lionsgate rescind the company's offer of shares issued to a fund controlled by company invesory Mark Rachesky. Those shares were issued to the company's second largest stockholder in an effort to fend off Icahn's takeover attempt.
Icahn is currently contesting that transaction in a British Columbia court.
The activist shareholder's latest bid expires Oct. 22.
Lionsgate stock closed at $7.14 per share Monday, down 1 percent.