Icahn in Takeover Bid for Lionsgate

NEW YORK: Carl Icahn has amended his previous tender offer for Lionsgate stock, launching a bid to take over all of the company’s outstanding shares.

The billionaire financier recently announced a tender offer to up his stake in the company to just under 30 percent from the current 19 percent. Lionsgate’s board called on shareholders to reject the bid, arguing that the $6 per share price tag undervalued the studio. Icahn is now offering to buy up all the shares he doesn’t already own. Lionsgate has already instituted a poison pill to prevent a hostile takeover from Icahn, who is not upping the $6 price for the new tender offer.  Icahn says he intends to pursue legal proceedings to set aside the poison pill.

"Due to management’s recent actions, I am now convinced that Lionsgate shareholders will never have the right to make important decisions. I am dismayed that Lionsgate’s board of directors chose to implement a poison pill and thus deny their shareholders the opportunity to participate in our offer. I believe these tactics serve only to strip shareholders of an opportunity and entrench management."

Icahn’s hostile takeover bid comes as offers are due for the acquisition of MGM—Liongsate is among the possible suitors for the debt-laden studio’s library. "I believe that Lionsgate’s management should not further leverage up the company to purchase a film library without allowing shareholders the opportunity to decide whether increasing exposure to this segment is wise. I believe library values are currently declining due to, in part, weak DVD sales. Lionsgate already has a major investment in a library—its own. It should be up to the shareholders to determine if they wish to more than "double down" on another library,  especially in light of the company’s admitted "substantial degree of leverage."

If his offer is successful, Icahn says we will replace the company’s board and refocus its strategy on the "consolidation of film and television distributors, as opposed to the acquisition of library assets." He continued: "I also believe that it may be desirable to replace top management with several individuals who more closely share our vision for the future of the company. I understand that such a dramatic shift in management and growth strategy may thrust Lionsgate into a potentially volatile period of transition, but I believe the company will emerge much stronger on the other end."