Canadian Regulators Nix Lionsgate’s ‘Poison Pill’

SANTA MONICA/VANCOUVER: Lionsgate is mulling an appeal over the British Columbia Securities Commission’s rejection of its Shareholder Rights Plan, which the independent studio put in place to fend off Carl Icahn’s hostile takeover attempt.

The studio said in a statement that it was "disappointed" by the decision, noting: "The company believes that its shareholders’ right to vote is paramount and any decision to cease trade the Shareholder Rights Plan should have been withheld until Lionsgate shareholders had the opportunity to consider and to vote upon it at the special meeting of shareholders on May 4, 2010."

Lionsgate’s board is continuing to recommend that shareholders vote for the plan next week, as well as reject Icahn’s $7-per-share takeover offer. Icahn, meanwhile, was celebrating the BCSC decision yesterday. He issued a statement in which he said:"I am gratified to see that—consistent with its vision to play a leading role in securities regulation that inspires investor confidence and supports fair, efficient, and innovative Canadian capital markets—the BCSC agreed with our view that Lionsgate shareholders should have the right to decide for themselves whether they wish to sell their shares in our tender offer. We commend the commission for its thoughtful consideration and resolution of this important issue."

Shareholders have until April 30 to accept Icahn’s offer, unless he decides to extend it. Icahn already owns close to 19 percent of the studio. The poison pill would be triggered if he reached 20 percent, allowing other shareholders to buy more shares at a discount. Reports indicate that more than 60 percent of shareholders will vote yes on the poison pill.