He extends hostile offer for a third time

Prospects for peace between Carl Icahn and Lionsgate appear to be dwindling.

Tensions flared Friday as Icahn extended his about-to-expire hostile takeover offer a third time and again blasted Lionsgate management. Lionsgate had no comment.

But the resumption of hostilities gave a strong signal that recent discussions to settle the year-long dispute haven’t panned out.

As part of extending the $7 a share tender offer for a week until May 28, Icahn’s announcement included the disclosure that he had lost ground in his attempt to win shareholder support for the hostile takeover. Icahn said 4.66 million shares — or about 4% of the total shares — had been tendered for his bid, compared with 7.4 million shares on May 10.

Shares of Lionsgate were down 3ยข to $6.81 in trading Friday on the New York Stock Exchange. Most analysts expect that Icahn — who owns 18.8% of shares — will have to sweeten the offer to gain enough shareholder support to reach the 50.1% level.

He made no reference to the settlement talks, which were disclosed four days earlier.

Icahn and Lionsgate have been battling for more than a year, triggered by Icahn’s unmet desire for seats on the 12-member board plus his frustration over the stock price.

Lionsgate has portrayed the billionaire investor as an incompetent meddler while Icahn has called for the ouster of Lionsgate management.

The minimajor disclosed May 17 that the Lionsgate board had approved placing $16 million into a trust for severance to five top managers if they’re kicked out “without cause” after a takeover by Icahn.

In his Friday response, Icahn called the approval “reprehensible” and complained about Lionsgate’s efforts to institute an anti-takeover “poison pill” that would be triggered if Icahn’s stake reaches 20%.

“We believe this latest action, together with the board’s failed and misguided attempts to implement a poison pill and its reckless retention (at enormous expense to shareholders — with no discernible benefit) of no less than six professional advisory firms (two financial advisers, three law firms and a public relations firm) to defend against our offer, shows just how far removed this board has become from its mission of holding management accountable and safeguarding the interests of shareholders,” Icahn said in a statement.

Lionsgate scored a victory on May 12 in its battle with Icahn, receiving the backing of 56% of its shareholders for its poison pill — even though that option has been rescinded by Canadian regulators.

Lionsgate has continued to urge shareholders to spurn Icahn’s offer.

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