Icahn proxy fight fails to materialize
Lionsgate shareholders have elected all 12 of the mini-major’s nominees to its board as a long-threatened proxy fight from billionaire Carl Icahn failed to materialize.
The move took place Tuesday at Lionsgate’s annual shareholders meeting in Toronto. The slate of directors included two new members — Mark Rachesky, the company’s largest shareholder with a 19.8% stake, and former Alliance Atlantis topper Phyllis Yaffe — along with co-chairman and CEO Jon Feltheimer and vice chairman Michael Burns.
Icahn hasn’t commented in recent months about Lionsgate. The company’s shares have nearly doubled in value since February, when Icahn began criticizing management over its spending and using its credit line for the $255 million acquisition of TV Guide Network.
Shares closed up 6¢ to $6.57 in trading Tuesday on the New York Stock Exchange.
Signs of a possible proxy fight emerged in March, when Lionsgate refused to give a board seat to Icahn. He then tried unsuccessfully to buy $325 million in Lionsgate debt but drew little interest from the debt holders.
The company had announced in July that Rachesky — who had publicly supported Lionsgate management — would replace Mark Amin on the board. Rachesky’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 1990-96.
Icahn has said in the past that he did not plan to launch a takeover battle for the mini-major, but he also questioned whether Lionsgate had the liquidity to meet obligations that could be triggered if any shareholder owns 20% of the stock. Icahn has a 17.7% stake, nearly double his holding at the start of the year.
Lionsgate agreed in the spring to sell half of the TV Guide assets to investors led by JPMorgan Chase & Co. and Allen Shapiro. Lionsgate cut 38 jobs at TV Guide in June along with eliminating 45 in March and 41 slots in November.
The company — home to “Mad Men,” “Weeds” and the “Saw” and Tyler Perry franchises — posted its second-best quarter ever last month amid growth in nearly every division, with a profit of $36.3 million for the period ended June 30 vs. $3.5 million a year earlier. Revenues jumped 30% to $387.7 million.
Feltheimer and Burns issued a statement Tuesday thanking the shareholders.
“Lionsgate and its board of directors are committed to creating long-term shareholder value through an innovative and disciplined growth strategy, as our track record over the past 10 years demonstrates,” the duo said. “We have developed one of the most valuable filmed entertainment libraries in the industry; a vibrant television business; a dynamic and growing portfolio of channel platforms; and an exciting and diversified slate of upcoming feature films, and we have continued to build these assets while maintaining one of the lowest overhead-to-revenue percentages in the industry and reducing overhead costs still further over the past year.”