Icahn Resumes Lionsgate Takeover Efforts

NEW YORK: Carl C. Icahn has restarted his efforts to take control of Lionsgate, commencing a tender offer, of $6.50 per share, in a bid to up his current stake of 37.9 percent.

The new hostile takeover efforts follow a ten-day truce during which Lionsgate and Icahn agreed to set aside their differences to talk about acquisition opportunities. "While certain discussions regarding acquisition opportunities might continue in the future, the Icahn Group determined that there were no immediate opportunities that would merit extension of the 10-day standstill period," Icahn Group said in a statement.

The new tender offer—priced under Icahn’s recently concluded $7/share offer—is conditioned upon the independent studio not entering into transactions outside of the normal course of business, such as the acquisition of assets over $100 million. In addition, the offer is subject to Lionsgate eliminating its poison-pill defense, put in place earlier this month to prevent Icahn’s stake from topping 38 percent.

Should Icahn’s stake top 50 percent, that could trigger a default on Lionsgate’s loan facility. Icahn’s statement notes: "If such acceleration occurs (which will not be a condition allowing the Icahn Group to withdraw the Offer), the Icahn Group believes that Lions Gate will need to immediately secure a replacement source of funding in order to continue to operate its business and avoid bankruptcy. The Icahn Group believes this is a problem of Lions Gate’s own making—had the board of directors not agreed to these controversial "poison put" provisions, the company would not now be facing this very difficult situation. As previously stated, the Icahn Group intends to hold the board responsible for any costs and damages the company might incur from having to obtain emergency financing to alleviate this situation."

Lionsgate has said it will review Icahn’s offer, which expires August 25.