Studio wants poison pill ruling overturned
Lionsgate’s appeal of a ruling by Canadian regulators tossing out its “poison pill” to block Carl Icahn’s hostile takeover bid has been pushed back to Friday.
The hearing was to have taken place Monday, but Lionsgate requested a delay; it was granted by Justice John Hall of the British Columbia Court of Appeal. The British Columbia Securities Commission hasn’t yet given a reason for throwing out Lionsgate’s proposed Shareholder Rights Plan last week.
Lionsgate had no comment about its request. Sources close to the company said it would help to learn why the poison pill was rejected.
Lionsgate’s poison-pill plan makes a hostile takeover more expensive by offering investors additional stock at a discount if Icahn exceeds a 20% stake.
Icahn’s asserted that the pill is unfair because shareholders should have the right to determine if they want to accept his offer at $7 a share. The mini-major’s set a shareholder meeting to vote on the plan for May 12 in Toronto.
Icahn’s extended his hostile takeover offer until May 10 after receiving a mild response from shareholders with about 5.5% of the shares tendered. Icahn, who already owns about 19% of the minimajor, has asserted his offer price is fair, although many analysts have said if Icahn expects to gain control of Lionsgate, he will have to sweeten his bid.
Lionsgate stock rose 9¢ to $7.01 a share Monday on the New York Stock Exchange.
Lionsgate has been battling Icahn for more than a year. The last volley was contained in last week’s bullish earnings outlook that’s 50% better than it forecast two months ago due to improvement in its TV business, record library revenues and higher home entertainment revenues.
Icahn, who has pledged to oust management if he gains control, has already asserted that the Lionsgate figures are meaningless due to a lack of specifics on amortization and spending on films.