Studio tells shareholders to take no action
Carl Icahn has raised his hostile offer for Lionsgate to $7 a share, a 17% increase.
The new bid, announced Thursday after the stock market closed, is the latest salvo in an ongoing battle between the billionaire — who holds 19% — and the minimajor.
Shares of Lionsgate, which had dropped 3 cents during the session, jumped 47 cents in afterhours trading to $6.84.
In response, Lionsgate issued a statement recommending that shareholders take no action. “Consistent with its fiduciary duties and in consultation with its special committee and financial and legal advisors, Lionsgate’s board of directors will review Mr. Icahn’s revised offer and will make its recommendation to shareholders promptly,” it added.
Lionsgate went directly to shareholders earlier this week in its battle with Icahn, portraying him as a meddler, and declaring it would be a “grave mistake” to accept his takeover offer. The minimajor made the assertion Monday in a letter to shareholders in advance of a May 4 meeting to enact the company’s poison pill provision that would dilute the value of Icahn’s shares if he exceeds a 20% stake.
“The Icahn Group lacks media industry expertise yet seeks to interfere in Lionsgate’s strategy and management and derail the company’s growth strategy to build value for all Lionsgate shareholders,” the company said in the 13-page missive.
Icahn has contended the poison pill would “frustrate” the ability of shareholders to decide whether to accept his offer. He’s suggested that Lionsgate management be replaced, noting that the shares have been trading at barely half their 2007 high and contending that the company’s overspending.
Lionsgate’s home to the Saw and Tyler Perry franchises, as well as “Mad Men” and “Weeds.” “Tyler Perry’s Why Did I Get Married Too” has grossed $50 million domestically in its first two weeks and its superhero spoof “Kick-Ass” opens wide on Friday with significant buzz.