Canadian panel throws out studio plan

Carl Icahn has scored a key victory over Lionsgate management with Canadian regulators voiding the minimajor’s poison pill, aimed at preventing the billionaire’s proposed hostile takeover.

The decision was issued Tuesday by The British Columbia Securities Commission, which didn’t disclose the reasons. It followed two days of hearings in Vancouver, where Lionsgate is headquartered.

Lionsgate said in a statement that it was disappointed and added it was considering an appeal. The poison-pill provision had been designed to dilute the value of Icahn’s shares if he exceeds a 20% stake.

The panel’s decision may lead to a higher bid by Icahn, who had no immediate comment Tuesday.

Icahn, who owns 19% of Lionsgate and has been seeking to oust the current management, had contended that the pill was unfair and prevented shareholders from deciding for themselves whether to accept his $7 a share offer, which expires Friday.

The announcement came after the stock market closed. But shares of Lionsgate jumped 45 cents in afterhours trading to $7.07 in a signal that investors believe Icahn may sweeten his bid again. Shares had declined 37 cents in the regular session.

Icahn upped his offer from $6 a share earlier this month. Analyst Matthew Harrigan of Wunderlich Securities told Daily Variety that the lower-than-expected box office for “Kick-Ass” — which grossed $34.8 milliion in its first 10 days — and the current sluggishness of the market may have left Lionsgate more “vulnerable” to a takeover by Icahn.

I think that if he bids $8.50, that may be enough to get it done,” Harrigan added. “Management’s done a good job strategically but I’m sure they were hoping for better things out of ‘Kick-Ass.’”

Lionsgate said Tuesday that it still planned to hold the May 4 vote in Toronto by shareholders on the pill, dubbed a shareholder-rights plan.

The company’s repeatedly defended the strategy as a way to prevent Icahn from succeeding in buying Lionsgate via an offer that it characterized as “financially inadequate, opportunistic and coercive” and not in the best interests of the company. It also noted that implementing the pill had caused Icahn to increase his bid.

The Shareholder Rights Plan was implemented to help ensure that all Lionsgate shareholders are treated equally and fairly in connection with any proposals to acquire effective control of the Company and has succeeded in getting the Icahn Group to amend its offer on two separate occasions,” Lionsgate said Tuesday.

The Canadian regulators didn’t disclose why they had rescinded the plan, saying only, “The panel’s reasons will follow.”

Lionsgate vice chairman Michael Burns had testified Monday before the commission that voting on the shareholder rights plan was running 61% in favor.

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