Carl Icahn’s taking a wait-and-see attitude toward Lionsgate becoming a possible partners for beleaguered MGM rather than dismissing the notion out of hand.
The investor, who’s amassed a 31.8% stake in Lionsgate as part of a hostile takeover attempt, told reporters Friday that he was skeptical of any deal between the two studios — given the challenges that both studios face.
“If you put two one-legged men together, they don’t run any faster,” he told Daily Variety. Lionsgate had no comment.
News emerged this week that Lionsgate’s recently held informal discussions with MGM about a potential merger, according to sources close to the situation. For Lionsgate, making an official offer for MGM would require that Carl Icahn support such a deal — even though Icahn’s still promising a proxy fight for control of the Lionsgate board.
Talks between Lionsgate and MGM have been held off and on for several years but the most recent round comes amid indications that MGM’s stepping up its efforts to sort out its murky future — a daunting task given its $3.7 billion debt load. Those initiatives include meeting with other candidates to run the studio and bring in production funds, including Spyglass Entertainment toppers Gary Barber and Roger Birnbaum and Summit Entertainment.
Icahn’s $7 a share tender offer — which received support from 13% of shareholders — expires on Wednesday.
The activist investor indicated Friday that he still plans to put up an opposition slate for the Lionsgate board, following through on his criticisms of mismanagement and over-spending. Lionsgate has repeatedly labelled Icahn’s offer “financially inadequate” and “coercive,” and portrayed him as incompetent meddler in prior investments.
Shares of Lionsgate rose 27 cents to $7.27 Friday, a gain of 4%. Lionsgate was added Friday at the close of trading to the Russell 2000 index, so the boost may have come due to investment funds preparing to bid for the stock.