Icahn Makes Hostile Takeover Bid For Lions Gate

Santa Monica, CA, United States (AHN) – Carl Icahn, a well-known activist shareholder, issued a takeover bid for Lions Gate Entertainment Corp. Friday following the board of directors’ rejection of his recent attempt to gain a larger stake in the firm.

Icahn currently owns 19 percent of Lions Gate and was aiming to increase that stake to 30 percent after launching a tender offer of $6 a share last week for up to 13.2 million shares.

However, Lions Gate said it believed the offer undervalued the firm, despite offering a 15 percent premium to the current share price, and recommended shareholders not tender their shares.

“The Lionsgate board of directors strongly believes that the unsolicited partial offer by the Icahn Group is inadequate from a financial point of view and doesn’t reflect the full value of Lionsgate shares,” said Lionsgate Co-Chairman and Chief Executive Officer Jon Feltheimer.

The board said giving Icahn a larger stake would give him too large a say in decisions and could even cause a default on its $340 million credit line from JP Morgan, due to the adjustment in company control.

Shares of Lions Gate have risen since last week’s offer and now trade just below Icahn’s $6 offer, a bid price he has left out there. He has increased his tender to account for enough shares to reach a 50.1 percent majority stake in the movie studio.

Icahn has been in a year-long battle with Lions Gate over their spending practices.

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