Hearing Scheduled for Lionsgate Shareholder Plan

SANTA MONICA/VANCOUVER: The British Columbia Securities Commission (BCSC) will hold a hearing on April 26 on Lionsgate’s shareholder rights plan—the indie studio’s attempt to fend off a hostile takeover bid by Carl Icahn.

Icahn is seeking to buy out the company’s stockholders for $6 a share, a price the studio has said is too low. Lionsgate, following receipt of Icahn’s initial tender offer, enacted a poison pill defense that the billionaire investor is looking to set aside. Lionsgate says that the shareholder rights plan will remain in full force unless it is not confirmed by a majority of Lionsgate’s shareholders at a May 4 special meeting. Glass Lewis & Co., a leading independent proxy advisory firm, has issued a report in support of Lionsgate’s shareholder rights plan, stating that the "permitted bid provisions adequately ensure that shareholders are able to consider a reasonable offer for the company. In light of these shareholder-friendly provisions, we believe that the Rights Plan may serve to protect shareholder interests in the event that a takeover bid does not reflect the full value of the company’s shares or is coercive. Consequently, we believe that shareholder ratification of the company’s rights plan is in shareholders’ best interests."

Following the April 26 hearing, the BCSC can choose to set aside the plan, not make any action or defer a decision until after the shareholder meeting in May. Lionsgate says it "strongly believes, and intends to argue before the BCSC, that any decision to cease trade the shareholder rights plan should only be made after Lionsgate’s shareholders have had the opportunity to fairly consider and vote upon it at the special meeting."