Swap sinks mogul's share to 33.5%.

Amping up the hostilities in its war with Carl Icahn, Lionsgate has managed to dilute the mogul’s stake from 37.9% to 33.5% by swapping $100 million of the company’s debt for stock.

The company announced the transaction Tuesday after the market closed.

Lionsgate said it exchanged $36 million of its 3.625% convertible senior subordinated notes due in 2025 and $63.7 million of 2.9375% convertible senior subordinated notes due in 2024 in a private transaction. The notes were converted into 16.24 million common shares at $6.20 a share — which Lionsgate described as a premium to the Monday closing price of $6.03.

Lionsgate stock had jumped 50 cents to $6.53 a share on Tuesday in the wake of Icahn launching another hostile takeove bid at the end of a 10-day truce with the minimajor at $6.50 a share — 7% less than his previous $7 a share offer. The new offer expires Aug. 25.

Icahn also reiterated his promise to launch a proxy fight for control of the Lionsgate board. In response, Lionsgate said its board of directors will review the takeover bid and advised shareholders to take no action at this time.

The truce, which had been enacted to explore mergers and acquisitions, apparently didn’t yield any concrete results before its expiration Monday night. Icahn said Tuesday he would not extend the truce for now but also noted that he wouldn’t dismiss the notion in the future.

“While certain discussions regarding acquisition opportunities might continue in the future, the Icahn Group determined that there were no immediate opportunities that would merit extension of the 10-day standstill period,” he said in statement.

Sources close to the situation have said Lionsgate execs presented a proposal last week to MGM debtholders under which Lionsgate toppers Jon Feltheimer and Michael Burns would have run a combined MGM and Lionsgate.

Icahn said Tuesday that his offer’s conditioned on Lionsgate avoiding any major transaction outside the normal course of business.

“It is extremely unlikely that the current management and board of directors of Lionsgate will allow shareholders of Lionsgate to make their own determination on the future path of the company, including decisions to make a major acquisition,” Icahn said.

Lionsgate has noted in previous statements that the majority of its investors have turned down Icahn’s previous attempts to take over the company. Earlier this month, it introduced a “poison pill” or shareholder rights program to prevent a hostile takeover if any single shareholder acquires more than 38%.

Liosngate has not set its next shareholders meeting but that event usually takes place in mid-September during the Toronto Film Festival.

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