Icahn increases Lions Gate hostile takeover offer to $7 per share
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Carl Icahn is turning up the heat on Lions Gate Entertainment.
The aggressive investor today sent a letter to shareholders of the Santa Monica-based independent studio informing them that he has increased his offer to $7 per share from the $6 bid he proposed last month.
Icahn’s move comes in the wake of Lions Gate management’s own public efforts, led by chief executive Jon Feltheimer and vice chairman Michael Burns, to rebuff the hostile offer in the past few weeks. The duo have frequently claimed it doesn’t value their company adequately.
‘We decided to raise our offer price not because we believed $6 per share to be inadequate but rather because we felt it necessary to make every effort to protect the investment we currently have in Lions Gate,’ Icahn said in his letter. ‘We do not feel comfortable that existing management is the right team to guide Lions Gate through this difficult period.’
Both sides have been lobbying shareholders over a vote scheduled for May 4 on a so-called ‘poison pill’ the company has proposed that would make it significantly more difficult for Icahn to gain control. In his letter, Icahn urged shareholders in bold, underlines and capital letters to ‘VOTE AGAINST THE POISON PILL!’
Lions Gate stock closed on Thursday at $6.37, implying that shareholders valued the company higher than Icahn’s offer from last month. On news of the letter, they shot up to $6.86 in after-hours trading.
In a statement, Lions Gate said its board will review Icahn’s offer and make a recommendation to shareholders shortly.
-- Ben Fritz