Icahn makes progress in Lionsgate fight

Billionaire receives more than 12% of shares in tender offer

Carl Icahn’s received more than 12% of Lionsgate shares through his tender offer, which will make him the largest shareholder in the minimajor at 31% if the shares are not withdrawn.

Icahn made the disclosure to Dow Jones a few hours before the expiration of his $7 a share offer.

Reps for Lionsgate declined to comment. Lionsgate shares were down 4 cents to $6.95 in mid-session trading on the New York Stock Exchange.

Mark Cuban, who holds 5.3% of Lionsgate, indicated last week that he’ll tender his shares to Icahn. About 3.7% of shareholders had tendered their shares before Icahn’s latest extension two weeks ago.

Other shareholders have until June 30 to tender their shares into the offer following its official expiration.

Icahn’s pledged that he’ll launch a proxy fight for control of the company, which usually holds its annual meeting and elects its board in September.

Additionally, with his stake over 20%, Lionsgate could default on its debt but the minimajor is expected to be able to persuade its lenders to grant it a waiver from those covenants.

On Monday, Icahn pledged he’ll bail out of Lionsgate stock if he doesn’t win his proxy fight to take control of the minimajor’s board. He accused the board of supporting a management team that is not grounded in reality. Icahn’s remarks came in response to Lionsgate slamming the billionaire in a lengthy letter to shareholders by declaring he has a history of “value destruction and self-serving actions.”

On Friday, the two sides had staged a similar battle with Icahn warning that Lionsgate may have to file for bankruptcy due to possible credit defaults. Lionsgate fired back with the assertion that it is healthy and will be able to resolve its balance sheet issues. The company also accused Icahn of making a lowball offer that shareholders should ignore.

Icahn’s bid values Lionsgate at $825 million. He’s currently the second-largest shareholder behind Mark Rachesky, a former Icahn associate who supports Lionsgate management and owns just under 20%. Gordon Crawford of Capital Research Global Investors, which owns 10.5%, has also voiced support for management.

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