Lionsgate Rejects Icahn’s Offer

SANTA MONICA: The board of directors at Lionsgate has unanimously rejected Carl Icahn’s unsolicited tender offer to up his stake in the company to just under 30 percent from the current 18.9 percent.

Last month, Icahn announced his intention to begin a tender offer for 13,164,420 common shares of Lionsgate for $6 per share. Lionsgate, in a statement, said that the offer "is financially inadequate and coercive and is not in the best interests of Lionsgate and its shareholders and other stakeholders. The board strongly recommends that Lionsgate shareholders not tender their shares into the Icahn Group offer."

Also cited as a reason for the rejection was that Icahn, with a 29.9-percent stake, "would likely have the power to effectively veto certain significant transactions and other matters requiring approval by aspecial resolution of shareholders." Moreover, the acquisition would constitute an event of default under Lionsgate’s credit facilities. In addition, Lionsgate said, the Icahn Group "lack industry experience. To the knowledge of Lionsgate, the Icahn Group has limited experience in operating a business in Lionsgate’s industry."

"The Lionsgate board of directors strongly believes that the unsolicited partial offer by the Icahn Group is inadequate from a financial point of view and doesn’t reflect the full value of Lionsgate shares," said Jon Feltheimer, the independent studio’s co-chairman and CEO. "Lionsgate is a strong and diversified company with a focused strategy that we expect to generate far greater value for shareholders. We have built the company piece by piece over the past 10 years through a patient, consistent and disciplined approach to both internal growth and external acquisitions. The board and the company’s management is committed to continuing to take all appropriate and necessary actions to build value for Lionsgate’s shareholders. We are confident we can better serve our shareholders by continuing to execute our strategic business plan, and the acquisition of effective control by the Icahn Group would significantly jeopardize that plan."