Talks Fail Between Icahn and Lionsgate

SANTA MONICA: Talks have halted between financier Carl Icahn and Lionsgate regarding his request to replace three board members, after Icahn refused to stop accumulating stock in the independent film and TV studio.

The failure to reach an amicable agreement may set the stage for a proxy battle or hostile takeover of the studio.

For the last three weeks, Icahn, Lionsgate’s third-largest shareholder, has been involved in friendly talks to place three board members of his choosing, including his son Brett Icahn.

Icahn has been an investor in Lionsgate for four years and recently upped his stake to 14.5 percent. The studio was willing to replace the board members, but the two sides could not agree on the “standstill agreement” Lionsgate was asking for—assurance that Icahn would not increase his stake to 20 percent or more.

Lionsgate co-chairman and CEO Jon Feltheimer and vice vhairman Michael Burns said, “Lionsgate has a strong track record of successful growth over the past nine years and is committed to building value for its shareholders. We are always open to hearing the ideas of our shareholders and exploring ways to incorporate them. Over the past three weeks, our Board of Directors has been in discussions with Mr. Icahn to consider how we could accommodate some of his requests, including the possible appointment of his designees to the Board of Directors. However, the Board ultimately concluded that it could not meet his requests and continue to serve the best interests of all of our shareholders, which is our number one priority.”

Icahn said: “We have recently been engaged in discussions with Lionsgate regarding the possibility of having a number of our designees added to Lionsgate’s board of directors. Those discussions have been terminated because agreement could not be reached concerning certain aspects of the standstill agreement that Lionsgate demanded as a condition to installing those board members.”