Lionsgate will include Carl Ichan as a voter in its upcoming shareholder vote on a poison pill that’s designed to make it more difficult for Icahn to complete a hostile takeover of the minimajor.
“We listen carefully to what our shareholders have to say, and we believe that this was a revision many of them wanted to see,” a Lionsgate spokesman said. “We believe that the proposed Shareholder Rights Plan is in our shareholders’ best interest, and we are delighted that two respected proxy advisory firms, Glass Lewis and Egan Jones, agree.”
Icahn, who owns about 19% of Lionsgate, boosted his bid to $7 a share from $6 on April 15. The company repeated its characterizations Friday of Icahn’s offer as inadequate, opportunistic and coercive.
In a letter sent to shareholders Friday, Lionsgate said the shareholder rights plan has been created to ensure that all shareholders are treated fairly in connection with any proposals to acquire effective control of the company.
The Shareholder Rights Plan your Board is recommending does not prevent change of control transactions,” the letter said. “By design, the Shareholder Rights Plan does not prevent or restrict a proxy challenge, but deters inadequate, opportunistic and coercive offers, such as the offer by the Icahn Group.”
Shares of Lionsgate were up 18 cents to $7.07 in mid-session trading Friday on the New York Stock Exchagne.
Should Icahn’s stake exceed 20%, it could trigger a possible default of its credit line. The company’s poison-pill provision would dilute the value of Icahn’s shares if he exceeds a 20% stake.
The letter also took issue with a recommendation issued Thursday by proxy advisory firm RiskMetrics to vote against the pill, partly due to Icahn’s shares not being counted in the voting. Icahn cited that recommendation in a letter issued an announcement Friday and said the process is still flawed despite Lionsgate’s revision — noting that holders of any shares purchased after the March 23 record date won’t be able to vote.
In a last ditch effort to salvage the Pill, the board today announced certain amendments to the Pill,” Icahn said. “This changes nothing. The Pill and the “voting” process are still gravely deficient and unfair. The board has intentionally structured the special meeting so as to maximize the likelihood that the views of the board will be imposed on those Lions Gate shareholders who would otherwise tender their shares in our offer.”
Frustrated by the stagnant stock price that’s barely half of its 2007 high, Icahn’s argued that Lionsgate’s management and board of directors has “failed” and pledged that he will oust the current management team if he gains control. He’s also said his offer represents a “premium” valuation for the assets.
Lionsgate is home to the “Saw” and Tyler Perry franchises, as well as TV shows “Mad Men” and “Weeds.” Its superhero spoof “Kick-Ass” led last weekend’s box office and has grossed $24.2 million in its first six days.