You will be redirected back to your article in seconds

Icahn offers bid on Lionsgate debt

Mogul amps up studio battle with latest move

Amping up his battle with Lionsgate, Carl Icahn has offered to buy as much as $325 million of the mini-major’s debt in what may be a prelude to a takeover offer.

Icahn, who holds 14.5% of Lionsgate, made the announcement Thursday but — in a move that left observers scratching their heads — declined to disclose the price he’s willing to pay. Lionsgate had no immediate response.

Icahn later told reporters that he’s not pushing for a sale of Lionsgate, but he was highly critical of its recent $250 million purchase of the TV Guide cable network.

Icahn said the offer is for all of Lionsgate’s $150 million convertible senior subordinated notes due in 2024 and for $175 million in notes due in 2025.

The bid, which would allow Icahn to gain more control of Lionsgate’s capital structure, is certain to create further discomfort for the company.

Icahn’s move came a day after the collapse of negotiations with Lionsgate over Icahn’s efforts to obtain seats on the 12-member board. Those discussions cratered over a “standstill” agreement that Lionsgate demanded as a condition of installing Icahn’s choices, including his 29-year-old son, Brett.

Lionsgate shares fell 27¢ to $4.69 Thursday on the New York Stock Exchange.

Icahn is the third-largest Lionsgate shareholder after Mark Rachesky, his former chief investment officer, and Steinberg Asset Management. Rachesky holds 19.4%, while Steinberg has a 14.9% stake; Capital Research has a 9.5% position.

Icahn disclosed in a Feb. 23 SEC filing that he could seek to add directors by expanding the current board or removing some members. Having board members would give Icahn better access to information about the mini-major.

The current board of the Vancouver-based company has 12 members, and eight of those seats must be filled by Canadian residents.

Lionsgate came under pressure from Icahn after reporting a $93.4 million quarterly loss on Feb. 9, when it announced that it plans to lower costs by making fewer movies. Since then, it’s scored solid box office from “My Bloody Valentine 3D” and “Tyler Perry’s Madea Goes to Jail.”

Icahn, who first became a shareholder in Lionsgate four years ago, has been pressuring the studio to cut costs, estimated at some $130 million annually. Lionsgate has eschewed high-cost features, opting instead for low- and mid-budget fare.

Analysts remain uncertain as to whether the company could fetch its full value in the current depressed environment. In addition to the “Saw” and Tyler Perry franchises, Lionsgate produces TV skeins “Mad Men” and “Weeds”; its library contains more than 8,000 films and 4,000 TV shows.

More Film

  • Benicio Del Toro and Josh Brolin

    Film Review: 'Sicario: Day of the Soldado'

    Amping up his battle with Lionsgate, Carl Icahn has offered to buy as much as $325 million of the mini-major’s debt in what may be a prelude to a takeover offer. Icahn, who holds 14.5% of Lionsgate, made the announcement Thursday but — in a move that left observers scratching their heads — declined to […]

  • Universal Launches Direct Distribution in Hong

    Universal Starts Direct Distribution in Hong Kong, Appoints Anita Cheung

    Amping up his battle with Lionsgate, Carl Icahn has offered to buy as much as $325 million of the mini-major’s debt in what may be a prelude to a takeover offer. Icahn, who holds 14.5% of Lionsgate, made the announcement Thursday but — in a move that left observers scratching their heads — declined to […]

  • Kobe Bryant Barred From Film Academy

    Oscar Winner Kobe Bryant Barred Entry Into Film Academy

    Amping up his battle with Lionsgate, Carl Icahn has offered to buy as much as $325 million of the mini-major’s debt in what may be a prelude to a takeover offer. Icahn, who holds 14.5% of Lionsgate, made the announcement Thursday but — in a move that left observers scratching their heads — declined to […]

  • Producer Jennifer Todd Beats Jason Blum

    Producer Jennifer Todd Beats Out Jason Blum in Academy Governors Runoff Election

    Amping up his battle with Lionsgate, Carl Icahn has offered to buy as much as $325 million of the mini-major’s debt in what may be a prelude to a takeover offer. Icahn, who holds 14.5% of Lionsgate, made the announcement Thursday but — in a move that left observers scratching their heads — declined to […]

  • Mel Gibson

    Mel Gibson Loses Bid to Block Release of 'Professor and the Madman'

    Amping up his battle with Lionsgate, Carl Icahn has offered to buy as much as $325 million of the mini-major’s debt in what may be a prelude to a takeover offer. Icahn, who holds 14.5% of Lionsgate, made the announcement Thursday but — in a move that left observers scratching their heads — declined to […]

  • Mary J. Blige

    Mary J. Blige to Star in Horror-Thriller 'Body Cam' for Paramount

    Amping up his battle with Lionsgate, Carl Icahn has offered to buy as much as $325 million of the mini-major’s debt in what may be a prelude to a takeover offer. Icahn, who holds 14.5% of Lionsgate, made the announcement Thursday but — in a move that left observers scratching their heads — declined to […]

More From Our Brands

Access exclusive content