Icahn extends Lions Gate tender offer for fifth time, hopes New York court will rule in his favor

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Dissident investor Carl Icahn has extended his tender offer to acquire Lions Gate Entertainment shares for a fifth time in hopes that a court in New York will issue a ruling making it easier for him to win an upcoming board of directors vote.

Icahn announced late Tuesday that his offer to buy outstanding Lions Gate shares has been extended from Thursday Dec. 2 to Dec. 10. The billionaire corporate raider also removed a provision from the tender offer by which he would only buy the stock offered to him if enough was tendered to raise his take from the current 33.5% to more than 50%. He also lifted the condition that Lions Gate rescind the issuance of more than 16 million shares to its second largest stockholder, Mark Rachesky, in a controversial debt-for-stock swap this past summer.

By Dec. 10, Icahn is expecting that the New York State Supreme Court will rule on his request for a preliminary injunction blocking Rachesky from voting the 16 million-plus shares at Lions Gate’s annual meeting scheduled for Dec. 14. A hearing on the injunction is schedule for Dec. 3.

Should Icahn prevail, it will make it much easier for him to win a board of directors vote at the Santa Monica film and television studio’s annual meeting, as Rachesky has been a strong supporter of current management. Icahn last week nominated five candidates for the company’s 12-member board who support his view that the studio needs to cut costs and replace top executives.


Icahn earlier this month lost a similar lawsuit in British Columbia Supreme Court in Canada, where Lions Gate is legally domiciled. He is appealing that decision.

The only condition on his new offer is that the New York court issue the injunction and block Rachesky from voting his shares. Should he succeed in court and pick up some stock in the current tender, that would give him momentum going into the annual meeting and help him win votes. Should the investor lose in court and the tender not take place, Lions Gate will be in a stronger position.

--Ben Fritz


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