Carl Icahn has lost a round in his bitter battle with Lionsgate as regulators in British Columbia spurned his efforts to overturn the recent $100 million debt-to-equity swap that reduced the billionaire’s stake to 33.5% from 37.3%.
A British Columbia Securities Commission panel made the oral ruling Wednesday afternoon, dismissing an application by Icahn for a temporary “cease trade” order against Lionsgate and funds controlled by Mark Rachesky. Even though most of Lionsgate’s operations are in Santa Monica, the minimajor is headquartered in British Columbia.
A spokesman for the panel issued a brief announcement following the hearing. Lionsgate said it was “pleased” by the ruling.
“In dismissing the application, the panel noted that the Court is the most efficient forum to resolve the issues and said that a temporary order is not necessary in the public interest at this time,” the regulators’ announcement said.
Icahn also filed suit this week in New York against Lionsgate, its board and board member Rachesky — who bought the converted shares from the company and saw his stake grow to 29% from 19.9% — along with Kornitzer Capital Management and John Kornitzer, who sold the $100 million in debt to Rachesky that was converted to stock.
The suit seeks damages, an injunction overturning Rachesky’s deal and a court order to bar the defendants from voting their shares to elect any directors. Rachesky worked for Icahn during 1990s.
In May, Canadian regulators sided with Icahn in vacating Lionsgate’s poison-pill provision, which was set up to be triggered when any investor reached a 20% stake in the company.
Shares of Lionsgate were off 22 cents to $6.78 in trading Wednesday on the New York Stock Exchange.
The Rachesky deal was announced on July 20 — a day after the 10-day truce between Lionsgate and the investor ended. At that point, Icahn had launched another hostile tender offer at $6.50 a share and promised that he’d follow through on his promise of a proxy fight to gain control of the Lionsgate board.