Lions Gate rejects Icahn’s latest tender offer
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It’s no surprise that the board of Lions Gate Entertainment has unanimously rejected the latest hostile tender offer from activist investor Carl Icahn to acquire all of its outstanding stock for $6.50 per share. In a regulatory filing Monday, Lionsgate said that the offer does not reflect the full value of the movie and television studio and that the timing is ‘opportunistic’ because it comes amid a tough economic climate for media companies. It noted that the offer price is below Icahn’s previous tender offer of $7 per share.
Lionsgate shares closed Monday at $6.72 per share, up 12 cents. Icahn’s offer expires Aug. 25.
Last week, Icahn filed suit against Lionsgate in the Supreme Courts of New York and British Columbia in hopes of unwinding a recent transaction in which the company issued stock to board member Mark Rachesky in a debt-for-equity deal as a defensive move to hinder Icahn’s efforts to take control of the studio, which operates out of Santa Monica but is legally domiciled in Canada.
The action increased Rachesky’s stake to just under 29% from 20% and diluted Icahn’s holdings to 33.5% from 38%, making it more difficult for him to take control of the company.
Last Wednesday the British Columbia Securities Commission denied Icahn’s request for a 15-day cease trading order that would have prohibited Rachesky from selling any of the stock he acquired in the transaction or from buying more shares. The order would have also prevented Lionsgate from issuing any new stock.