Icahn move may be costly

B'buster battle to hit boiling point on May 11

NEW YORK — Firing off the latest salvo, Blockbuster warned shareholders Friday that it will have no choice but to pay embattled chairman-CEO John Antioco $54 million in severance if he’s booted from the top board seat by corporate raider Carl Icahn.

The battle for control between Antioco and Icahn — now Blockbuster’s single largest shareholder — will come into full view May 11 at the vidtailer’s annual meeting, when Icahn will ask shareholders to elect his slate to the board.

Icahn is seeking a seat for himself, along with seats for veteran entertainment execs Ed Bleier and Strauss Zelnick.

Antioco said last week that he remains committed to Blockbuster, but he would have to resign if he lost the chair post.

Blockbuster made the disclosure that Antioco would be owed $54 million in a filing with the Securities and Exchange Commission. Company said his removal from the chairman’s seat would constitute “good reason” and entitle him to severance.

Icahn countered that no such severance would be owed if a separate proposal to create a new board seat for Antioco succeeds.

But Blockbusters said in its SEC filing that Antioco would have to be reinstated as board chair.

Icahn, who has been openly dismissive of Antioco, said while his proxy fight would get him only a minority voice on the board, Antioco still would be held “much more accountable.”

Icahn’s concerns with Antioco’s rule and the recent elimination of Blockbuster’s traditional late-fee structure were echoed Friday by Standard & Poor’s, which cut the vidtailer’s debt ratings deeper into junk status.

Blockbuster shares were down 6¢ to close at $9.90 in trading Friday.