Icahn Suffers Defeat in Lionsgate Board Battle

SANTA MONICA/VANCOUVER: Lionsgate shareholders have voted to elect all of the independent studio’s director nominees, rejecting the slate proposed by Carl Icahn.

"We appreciate the strong support we have received from our shareholders throughout this process," Lionsgate said in a statement. "Today’s outcome reaffirms that Lionsgate shareholders continue to have confidence in the board’s and management team’s strategy to enhance value for all Lionsgate shareholders. With Lionsgate poised for continued future success, the Board and management team will continue to focus on building the company’s strong portfolio of brands and franchises and positioning our unique and diversified platform of assets for future growth."

Icahn, who has been attempting a takeover of the studio and has been harshly critical of Lionsgate’s board and senior management, said he was "disappointed that shareholder democracy has failed—or rather was subverted." He referenced the prior issuance of 16 million shares to director Mark Rachesky "at a bargain price"—a debt-for-equity swap that Icahn had attempted to block in court. "It is clear to us from our analysis of the preliminary voting results that had this dilutive transaction been rescinded, as we had requested of courts in New York and Canada, our slate of nominees would have been elected," Icahn said.

He continued, "This whole situation is a very sad commentary on the state of corporate governance today. The biggest losers are the shareholders of Lionsgate who were deprived, as a result of the machinations of Lionsgate’s board and senior management, of the opportunity to receive a large premium for their shares in our tender offer. Unfortunately, shareholders might be in for even more pain. The shares have already lost more than 8 percent of their value since December 8, 2010, the day before the New York Supreme Court denied our motion for a preliminary injunction regarding the dilutive transaction."

Icahn concluded, "We are pleased that the New York Supreme Court will hold a full trial on the dilutive transaction within the next several months and will require Lionsgate to hold a meeting of shareholders again in September 2011 following the ruling in that case. We also intend to continue pursuing legal remedies in Canada. We will continue to monitor the situation at Lionsgate and will aggressively take all actions necessary to protect our investment."