In the latest salvo in the Lionsgate battle, Carl Icahn has extended his offer to buy $325 million of the mini-major’s debt until May 1 — even though the offer has generated mostly yawns so far from debtholders.
Meanwhile, word surfaced Tuesday that Lionsgate has been in talks to sell a minority stake in its TV Guide Network.
The company, which had no comment Tuesday, closed the $255 million TV Guide purchase in March after former owner Macrovision spurned an earlier agreement with media investor Allen Shapiro (Daily Variety, Jan. 6). Now it’s understood that Shapiro and JPMorgan Chase’s private equity arm, One Equity Partners, are back in the mix to potentially acquire a stake in the cabler.
Icahn’s extension of the debt offer, announced Tuesday morning, came in response to Lionsgate’s private deal with two bondholders to refinance $66.6 million in convertible debt, effectively preventing those unidentified bondholders from tendering their bonds to Icahn.
As part of extending the offer, which had been set to expire Monday, Icahn issued a statement blasting the private deal.
“I believe Lionsgate’s ‘refinancing exchange agreement’ — which favors a select few bondholders at the expense of all shareholders and the other bondholders — may have confused some bondholders,” he said. “We are therefore extending our offer.”
The activist investor, who holds 14.5% of Lionsgate stock, said the terms of his tender offer remain unchanged. Icahn also disclosed that he’s obtained only $8.9 million of the bonds — less than 3% — under the terms of his offer.
The Lionsgate deal, announced Monday, covers its 3.625% senior subordinated notes and moves back the date when the bondholders can force Lionsgate to buy back the notes to 2015 from 2012. It also lowers the conversion price to $8.25 from $14.28 per unit.
Icahn has said in the past that he doesn’t plan to launch a takeover battle for Lionsgate, although his move to acquire the debt, announced March 12, could enable him to convert his debt into common stock. However, he’s questioned whether Lionsgate has the liquidity to meet obligations that would be triggered if any shareholder owns 20% of the stock.
Icahn’s offer is for all of Lionsgate’s $150 million convertible senior subordinated notes due in 2024 and for $175 million in notes due in 2025. And he’s remained highly critical of the TV Guide Network deal.
Lionsgate shares rose 13¢ to $4.79 on Tuesday on the New York Stock Exchange.