Studio says offer doesn't fairly value the minimajor

Continuing to spurn Carl Icahn, Lionsgate has officially rejected the billionaire’s sweetened bid for the company, asserting that his hostile offer doesn’t fairly value the minimajor and has too many conditions.

Icahn hiked his bid for Lionsgate on Aug 31. to $7.50 a share offer but insisted that Lionsgate rescind its July 20 debt-for-equity deal with Lionsgate director Mark Rachesky, or convert Rachesky’s shares into nonvoting stock.

Lionsgate responded Wednesday after the stock market closed in a Securities and Exchange Commission filing, recommending to its shareholders that they not tender their stock.

“The Offer does not reflect the full fundamental and strategic value of Lionsgate,” it said. “Over the past ten

years, Lionsgate, under the direction of the Board, has developed and executed a disciplined three-phase

strategic plan to create and build a diversified media business and generated significant shareholder value.”

Icahn’s offer expires Oct. 22 and he’s asked the Supreme Court of British Columbia to reverse the issuance of Lionsgate stock to Rachesky with a hearing set for Oct. 12. The company’s July 20 swap of debt for equity increased Rachesky’s stake to 29% and reduced Icahn’s stake from 38% to 33%.

“We believe that there is no basis for such an order, nor can we control whether this condition to the Offer will be satisfied,” Lionsgate said Wednesday.

Icahn’s also promised to launch a proxy fight to replace the board. Date for the Lionsgate annual meeting hasn’t been set and probably won’t occur until November or December.

Shares of Lionsgate were up 2 cents to $7.14 in trading Wednesday on the New York Stock Exchange.

It’s the fourth time this year that Icahn’s made a tender offer to Lionsgate shareholders — blasting away at Lionsgate’s management and board each time over what he sees as excessive spending on overhead and film production.

Lionsgate noted in Wednesday’s filing that it has scored recent back-to-back successes “The Last Exorcism” and “The Expendables.” It also pointed out Lionsgate’s television slate earned 26 Emmy nominations including “Mad Men” winning its third consecutive Emmy for Outstanding Drama Series.

Follow @Variety on Twitter for breaking news, reviews and more