Legal Battle Continues Between Icahn, Lionsgate

NEW YORK: Carl Icahn is appealing the decision by the Supreme Court of British Columbia upholding Lionsgate’s debt-equity swap with Mark Rachesky.

The billionaire investor who is attempting a hostile takeover of the independent studio took issue with the Rachesky deal—the issuance of 16,236,305 common shares at a price of $6.20 per share—as it diluted his own stake from 38 percent to about 33.5 percent. Icahn called the deal a “sham transaction” in his legal filing back in July.

Icahn is looking to acquire additional Lionsgate shares at a price of $7.50 each. He is currently facing a lawsuit filed by Lionsgate which alleged he had played a "double game" in his dealings with Lionsgate and MGM. The suit, filed last week, noted, "While urging Lionsgate shareholders to support his takeover campaign…to ensure that Lionsgate did not pursue a ‘delusional’ MGM transaction, Icahn was quietly amassing a huge position in MGM debt with the undisclosed intention of reaping profits from both sides in an eventual merger."

MGM today filed for bankruptcy protection, with support from debt-holder Icahn. Following its reorganization, the studio will be combined with Spyglass Entertainment.