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Carl Icahn closes in on 17% stake in Lions Gate

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It sure doesn’t look like Carl Icahn is losing interest in Lions Gate.

The activist shareholder, who has been very critical of the independent movie and television studio’s management, has been gobbling up shares over the last few weeks and his stake in the company is approaching 17%. Just today he bought 1.06 million shares. Since May he has grown his stake from 14.5% to 16.9%.

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Look for Icahn to keep buying shares until he hits about 19.9%. He won’t go to 20%. That’s because anyone who acquires 20% or more of Lions Gate stock could trigger certain change of control covenants the studio has with its lenders. Triggering those covenants could lead the company’s banker, JP Morgan, to declare Lions Gate’s credit facility in default.

Icahn, who has been unsuccessful in his effort to get a few seats on the Lions Gate board, is the second-largest shareholder behind Mark Rachesky, who owns nearly 20% of the stock. Rachesky, who used to work for Icahn, is more favorable toward Lions Gate’s management and is expected to be nominated to a board seat at the company’s annual meeting this September in Toronto.

-- Joe Flint

Photo: Carl Icahn by Mark Lennihan/Associated Press


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