The war between Lionsgate and Carl Icahn has escalated as the proxy fight for control of the mini-major continues.
The billionaire investor, who owns 33% of Lionsgate, launched a website Monday called “Save Lions Gate,” containing a document titled “Why Change Is Needed at Lions Gate” that details Icahn’s reasons why the board at the film company should be replaced. Website contains extensive details on Lionsgate’s $100 million debt-for-equity swap in July with director Mark Rachesky, whose stake rose from 19% to 29% as a result, and asserts that the transaction was underhanded and unprofessional.
“Shareholders, would you want these guys running your family business, let alone Lions Gate?” the site asks.
Front page of the site asserts that Icahn’s hedge fund would have turned a $100 investment into $145 after five years, while the same amount invested in Lionsgate shares would today be worth $56. “$100 would remain if you stuffed it in a mattress,” the site said.
For its part, Lionsgate has amended its lawsuit against Icahn, which alleges he was “secretly plotting” in March to profit from merging Lionsgate and MGM while deriding the potential combo in his public statements.
In a filing Friday, the company asked that Icahn correct his misstatements, compensate Lionsgate investors and pay damages for interfering in the company’s plans. The amended complaint noted that Icahn’s son Brett Icahn is absent from the billionaire’s slate of board candidates, to be voted on by Lions gate shareholders at the company’s Dec. 14 annual meeting in Los Angeles.
“While Lionsgate’s initial complaint has thus already achieved benefits for the company and all of its shareholders, Lionsgate files this amended complaint to remedy remaining legal wrongs, including the Icahn Group’s continued failure to disclose the extent of the Icahn Group’s MGM debtholdings and the history of its trading activity in MGM debt,” Lionsgate said.
The Icahn slate includes veteran showbiz exec Chris McGurk along with Michael Dornemann, Jay Firestone, Daniel Ninivaggi and Harold T. Shapiro.
He’s also asked shareholders not to support five members of the 12-member Lionsgate slate including Burns, Rachesky, Harald Ludwig, G. Scott Paterson and Hardwick Simmons.
Icahn’s been attempting to take over Lionsgate for much of this year and has extended his current $7.50-a-share hostile tender offer for Lionsgate five times.
The stock, which hit a two-year high of $7.65 on Oct. 15, was off 11¢ to $7.25 in trading Monday.
Lionsgate announced its 12-member slate on Nov. 19. It’s the same as the current board except that Brian V. Tobin’s slot will be filled by Frank Giustra, who founded Lionsgate in 1997.
Icahn’s website said Rachesky debt-equity swap cost Lionsgate shareholders $14.5 million.
Lionsgate said the transaction saved it $3.2 million cash in interest expenses.