Slate to be voted on at shareholders meeting
Building defenses against a possible takeover move by Carl Icahn, Lionsgate has allied with Mark Rachesky, its largest shareholder, and announced he’ll be part of its slate of board of directors nominees.The minimajor made the announcement as the stock market opened Thursday. Shares were up 12¢ to $5.77 on the New York Stock Exchange. Lionsgate said the slate would be voted on at its annual shareholders meeting, expected to take place in September in Toronto. The company also said it will announce the remainder of its board slate “in the near future.” Rachesky, who owns 19.8% of Lionsgate, will replace Mark Amin on the board. He’s co-founder and president of MHR Fund Management, which has been a major Lionsgate shareholder for over five years, and worked as an Icahn strategist from 1990 to 1996. Icahn, the second-largest Lionsgate shareholder at 17.7%, has been critical of Lionsgate management. He was not available for comment Thursday. “Dr. Rachesky is an investor who shares our vision for continued growth and diversification,” Lionsgate co-chairman-CEO Jon Feltheimer and vice chairman Michael Burns said in a statement. “He brings a strong independent voice to our board as well as leadership in the wireless and digital media space that will be invaluable to our continuing evolution as a next- generation studio.” “I look forward to joining the Lionsgate board of directors and assisting management in its mission to continue building shareholder value,” Rachesky said in a statement. Lionsgate has a 12-member board that’s elected annually and is required — as a Canada-based company — to have Canadian residents occupy eight of those slots. Icahn has gradually boosted his stake in recent weeks. He’s said in the past that he doesn’t plan to launch a takeover battle for the minimajor, but he’s questioned whether Lionsgate has the liquidity to meet obligations that could be triggered if any shareholder owns 20% of the stock. Icahn holds 20.74 million shares, nearly double the 10.8 million he held at the start of the year. The billionaire, who began buying Lionsgate shares in 2005, hasn’t disclosed his specific intentions toward the minimajor. Ownership of more than 20% could cause a default on Lionsgate’s $340 million revolving credit line under the company’s change of control provisions. Rachesky increased his holding in March to just short of 20%. Icahn’s been critical of Lionsgate management over the use of its revolving credit line for its $255 million purchase of the TV Guide network and websites and has urged the minimajor to cut costs. His affiliates indicated last month that they may seek to add nominees to the company’s board by removing directors or expanding the size of the board. Earlier this year, Lionsgate refused to give a board seat to Icahn, and it recently agreed to sell half of the TV Guide assets to investors led by JP Morgan Chase & Co. and Allen Shapiro. Lionsgate cut 38 jobs at TV Guide in June along with eliminating 45 jobs in March and 41 slots in November. Icahn also tried unsuccessfully this spring to buy $325 million worth of debt but his offer drew little interest from the debt holders.
Want Entertainment News First? Sign up for Variety Alerts and Newsletters!