In an escalation of hostilities, Carl Icahn’s announced plans for a proxy fight to take over Lionsgate.
The billionaire disclosed Tuesday that he’ll put up an opposition slate for the board due the current board not holding management accountable for what he believes is excessive spending.
“We have lost confidence in the management and the board and therefore plan to have a proxy fight,” he told Daily Variety.
Icahn also said it was “reprehensible” that the board’s set up a $16-million fund for potential severance to five top execs. The billionaire, who owns 18.8% of Lionsgate, has been calling for the ouster of top management and has been denied in efforts to obtain seats on the12-member board.
Icahn added that he would keep the company headquartered in Canada if the proxy fight’s successful.
Lionsgate had no immediate response. The minimajor hasn’t yet set its next annual meeting, at which shareholders will vote on board members.
Icahn also extended Tuesday his hostile offer to buy the minimjaor and dropped the requirement for at least 50.1% of shares to be tendered for the deal to go through.
The revamped bid expires June 16. It’s the fourth extension of the offer, which was due to expire Tuesday.
Lionsgate said in response that its board will review the revised offer — still at $7 a share — and noted that the number of shares tendered has remained at 4%.
Icahn, owns 18.8% of Lionsgate, launched the bid in March after extensive disputes with management over spending and acquisitions.
Lionsgate shares rose 6 cents to $6.86 in mid-session trading on the New York Stock Exchange. The company’s releasing its quarterly earnings at the end of the session.
“Lionsgate’s shareholders have demonstrated that they believe the Icahn Group’s offer is financially inadequate,” the company said. “Lionsgate appreciates the continued support of its shareholders and notes that, while there is no need for shareholders to take action at this time, those shareholders who have tendered into the offer can still withdraw their shares.”
Icahn and Lionsgate held settlement talks seveal weeks ago but those apparently did not go anywhere.
The two sides have been battling for more than a year, triggered by Icahn’s unmet desire for seats on the board plus his frustration over the stock price. Lionsgate has portrayed the billionaire investor as an incompetent meddler.