Icahn gains only a small part of Lion’s Gate’s public debt

If at first you don’t succeed, try again, the saying goes.

Then again, a second attempt is no guarantee of success.

Carl Icahn received a paltry $583,000 worth of convertible bonds for his extended tender offer for all of Lions Gate Entertainment Corp.’s $316 million in public debt, according to a filing made late Monday with the Securities and Exchange Commission.

The activist shareholder extended his offer to buy Lions Gate’s convertible debt to May 1 after bondholders initially tendered only $8.8 million in bonds last month, less than 3% of the total outstanding.

At the time, Icahn criticized Lions Gate for making a last-minute deal with two bondholders who agreed to exchange their bonds for a new issue of debt, thereby undercutting his tender offer.

Icahn said in a regulatory filing that he believed Lions Gate’s refinancing exchange agreement “favors a select few bondholders at the expense of all shareholders and the other bondholders” and “may have confused some bondholders.”

Subsequently, investors withdrew more than $8 million of the bonds that were originally meant to be tendered to Icahn.

Icahn has been critical of Lions Gate management for what he views as the company’s bloated overhead and its recent acquisition of the TV Guide cable network. Lions Gate is in talks with several potential partners to sell up to 50% of the channel, for which the Santa Monica movie and television studio paid about $250 million.

Icahn had been threatening to launch a proxy contest, but that has yet to materialize. However, Wall Street analysts who follow Icahn have cautioned against viewing the latest setbacks as an end to the activist shareholder’s attempt to gain tighter control over the company.

Icahn still has time to put up a slate of directors before Lions Gate’s annual shareholder meeting in September. Hoping to fend off the activist shareholder, who owns 14.5% of Lions Gate’s common stock, the company has spent millions of dollars assembling a team of high-powered law, public relations and proxy solicitation firms.

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claudia.eller@latimes.com