×

Icahn files suit against Lionsgate

Mogul seeks court order to overturn deal

Carl Icahn has amped up the battle over Lionsgate, filing suit over the recent $100 million debt-to-equity swap that reduced Icahn’s stake to 33.5% from 37.3%.

“We view this transaction as a prime example of scorched earth tactics executed with other people’s money — in this case, the money of Lionsgate shareholders — and they will be met with an equally forceful response,” Icahn said Monday.

Icahn filed suit in New York against Lionsgate, its board and Mark Rachesky, who bought the converted shares from the company and saw his stake grow to 29% from 19.9%. Also named in the action, which was announced Monday by Icahn, were Kornitzer Capital Management and John Kornitzer, who has supported Lionsgate management.

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.

Icahn also disclosed that he had filed a petition seeking orders against Lionsgate and Rachesky to the Supreme Court of British Columbia, where Lionsgate is headquartered. The activist investor said the British Columbia Securities Commission will hold a hearing Wednesday.

In May, Canadian regulators vacated Lionsgate’s poison-pill provision, which was set up to be triggered when any investor reached 20%.

A Lionsgate spokesman declined to comment.

Shares of Lionsgate were up 12 cents to $6.90 in trading Monday 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.

“If allowed to stand, this scheme will insulate the directors and management from having to face a fair election at the upcoming annual meeting of Lionsgate’s shareholders,” Icahn said Monday.

“These transactions, in which the board of directors of Lionsgate provided stock that was acquired by Mark Rachesky at the bargain price of $6.20 per share, after recently advising all Lionsgate shareholders not to accept my previous tender offer of $7.00 per share because the price was allegedly ‘inadequate,’ have the effect of insulating the existing directors and management from a proxy fight, as well as enriching one director at the expense of all shareholders,” Icahn said.

For its part, Lionsgate has repeatedly called Icahn’s tender offers “financially inadequate and coercive.” It’s also asserted that Icahn’s track record shows that he’s been an incompetent meddler in showbiz sector and has blasted his accusations of excessive spending.

More Film

  • Gabrielle Carteris

    SAG-AFTRA Signs Netflix Deal With Expanded Coverage

    SAG-AFTRA and streaming giant Netflix have agreed to a new three-year contract with expanded coverage for union performers. Netflix has previously employed SAG-AFTRA members under the union’s standard master contracts for television and film and had been signing on a production by production basis. The union announced Saturday that the new deal recognizes performance capture as covered work [...]

  • Neve CampbellVariety's Power of Women NY

    Neve Campbell Seeking SAG-AFTRA Board Seat on Matthew Modine Slate (EXCLUSIVE)

    Neve Campbell is running for a SAG-AFTRA national board seat as a member of presidential candidate Matthew Modine’s progressive Membership First slate. Campbell is best known for starring as Sidney Prescott in the “Scream” movies and as LeAnn Harvey in “House of Cards.” Her credits include “Skyscraper,” “Wild Things” and “The Craft.” Election ballots will [...]

  • Themba-Bhebhe

    Durban FilmMart’s Themba Bhebhe on Diversity: ‘We Are At a Crossroads’

    DURBAN–A new thematic strand at this year’s Durban FilmMart, Engage @ DFM, offers a series of think tanks and in-depth discussions concerning diversity and de-colonial approaches to and models for filmmaking. To head up the new initiative, the DFM tapped guest curator Themba Bhebhe, who has led the Diversity & Inclusion initiative at the last two editions of [...]

  • Durban Film Festival 2019 / Copyright

    South African Creatives Grapple Over Copyright Amendment Bill

    DURBAN–The South African government is planning to update its four-decade-old copyright legislation, but what that means for filmmakers was up for debate during a contentious and often heated session at the Durban FilmMart this week. While the Copyright Amendment Bill awaits the signature of President Cyril Ramaphosa, industry stakeholders remain divided over how the proposed [...]

  • 'The Lion King' Ruling Box Office

    'The Lion King' Ruling Box Office With Dazzling Debut at $180 Million

    Disney’s “The Lion King” has jolted the North American box office back to life with an opening weekend in the $180 million range, estimates showed Saturday. “The Lion King” will record the second-best opening of 2019 — and could replace “Incredibles 2,” which launched last year with $182.7 million, as the ninth biggest North American [...]

  • 'Tomb Raider' Star Simon Yam in

    'Tomb Raider' Star Simon Yam in Hospital After Stabbing

    Hugely popular Hong Kong actor, Simon Yam was stabbed while on stage Saturday at a presentation in Zhongshan, Guangdong province in southern China. He is in hospital recovering. The incident happened at the opening of a branch of the Beijing Easyhome building materials company, where Yam was a guest. A man was seen rushing on [...]

More From Our Brands

Access exclusive content