cahn Strengthens His Position Vs. Lionsgate

As Carl Icahn’s stake in Lionsgate balloons to nearly 40%, bizzers and Wall Streeters are perplexed about the maverick investor’s next move and what the ongoing drama means for the company. Icahn needs to acquire 12% more of the company to become its controlling shareholder. It’s expected that Lionsgate brass will have no choice but to try to negotiate a settlement that will likely involve giving an Icahn rep at least one seat on the company’s board of directors. Icahn has promised to launch a proxy fight to replace Lionsgate’s 12-member board and oust toppers Jon Feltheimer and Michael Burns. The completion of Icahn’s hostile $7 a share tender offer for the minimajor, which expired midnight Wednesday, had left him a with 33.9% stake in Lionsgate. On Thursday, he acquired an additional 4% of the company by buying 4.64 million shares on the open market at $7 a share, bringing his total holdings 44.8 million shares, or 37.9%. Lionsgate responded Thursday evening by announcing a poison pill that will be enacted if Icahn’s stake hits 38 percent. The “shareholder rights plan” — approved by its board — makes a takeover prohibitively expensive by issuing one share purchase right to each outstanding common share of Lionsgate as of the close of business on July 12.
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