Lionsgate Shareholders Reject Icahn Offer; Proxy Fight Looms

Activist shareholder attempt to buy control of the independent studio fails, so he’s aiming at the board

Last Updated: June 4, 2010 @ 11:48 AM

Lionsgate announced Tuesday that its shareholders once again rejected an offer by activist shareholder Carl Icahn to buy the company for $7.00 per share. Now the notorious raider says he’s girding for a proxy fight.

This ongoing pas de deux had become a real yawner. Icahn wants control, but won’t overpay for the stock; now he’ll dig in to try and dislodge the board.

Lionsgate management has enough of a hold over the major shareholders, apart from Icahn, to keep them from dumping stock at a price pretty close to market. (It’s now trading at $6.83.)

Not sure when this dance will end, but Icahn’s made it clear that he won’t give up.

The news release follows below: 

Lionsgate (NYSE: LGF) (the “Company”) today announced that its shareholders again rejected the offer by Carl Icahn and certain of his affiliated entities (the “Icahn Group”) to acquire up to all of Lionsgate’s common shares for U.S.$7.00 per share in cash.  Less than 4% of shareholders tendered into the offer. 

The Company stated, “Lionsgate’s shareholders have demonstrated that they believe the Icahn Group’s offer is financially inadequate.  Lionsgate appreciates the continued support of its shareholders and notes that, while there is no need for shareholders to take action at this time, those shareholders who have tendered into the offer can still withdraw their shares.”

In light of the fact that the Icahn Group has extended its offer to June 16, 2010 at 8:00pm New York City time and waived its minimum condition, and consistent with its fiduciary duties and in consultation with its Special Committee and financial and legal advisors, Lionsgate’s Board of Directors will review the Icahn Group’s revised offer and will make its recommendation to shareholders promptly. The Board of Directors’ recommendation will be included in an amended Solicitation/Recommendation Statement filing on a Schedule 14D-9. 

As previously announced, the Company will issue its financial results for the fourth quarter of fiscal 2010 (quarter ended March 31, 2010) and the full fiscal year 2010 (year ended March 31, 2010) after market close today, and will hold an analyst and investor conference call at 9:00 A.M. ET/6:00 A.M. PT tomorrow, June 2, 2010.

Morgan Stanley & Co. Incorporated is serving as financial advisor to Lionsgate and Heenan Blaikie LLP is serving as legal advisor. Perella Weinberg Partners LP is serving as financial advisor to the Special Committee of the Lionsgate Board of Directors and Wachtell, Lipton, Rosen & Katz is serving as U.S. legal advisor and Goodmans LLP is serving as Canadian legal advisor.