Renews bid for Lions Gate after truce ends
By Andrew Vanacore, Business Writer
NEW YORK (AP) --Activist investor Carl Icahn declared an end to his brief truce with boutique film studio Lions Gate Entertainment Corp. on Tuesday, renewing his bid to take over the company and replace its board.
Icahn disclosed that he now controls 37.9 percent of Lions Gate Entertainment Corp.’s shares — although a defensive move by management to swap debt for equity cut that to 33.5 percent on Tuesday. Still, he has amassed enough of a stake that it could be difficult for the company’s management to make major decisions without his OK.
And he said he will launch another tender offer for the stake he doesn’t own, this time dropping his offer price by 50 cents to $6.50 per share. Icahn’s latest bid values the company at about $767.7 million, based on the number of shares the company had outstanding as of June 1. It would cost him $476.7 million to buy up what he doesn’t own.
Lions Gate shares fell more than 15 percent in the weeks after Icahn’s previous tender offer expired, closing at $6.03 on Monday. The stock jumped 50 cents, or 8.3 percent, to close at $6.53 on Tuesday, after the new offer was announced.
Icahn said the offer is conditioned on Lions Gate avoiding any major transaction outside the normal course of business. The company has been considering a bid for the Metro-Goldwyn-Mayer Inc. film studio, a move Icahn opposes.
After Icahn’s renewed bid, the company said it had swapped $100 million in convertible bonds for common shares at a price of $6.20. The move added 6.2 million new shares, lifting the company’s outstanding share count to about 135 million and reducing its debt.
That pushed Icahn’s stake to about 33.5 percent from 37.9 percent.
Icahn and Lions gate announced a 10-day truce beginning July 9 to give the two sides time to discuss acquisition options. That period ended Monday and apparently did not provide any breakthrough or improved relations.
In a statement Tuesday, Icahn said the company’s management and board are refusing to let shareholders have a say in the company’s future. As a result, Icahn said again that he will nominate his own slate of directors to replace the company’s board.
Lions Gate released a brief statement saying only that it will consider Icahn’s latest offer and make a recommendation to shareholders “promptly.”
Lions Gate has pointed out that the majority of its investors have spurned Icahn’s previous attempts to take control of the company.
It introduced a shareholder rights program, also referred to as a “poison pill,” earlier this month to prevent a hostile takeover. The plan would allow other shareholders to buy extra shares at a discount in case of a hostile bid, which would dilute the stake of any hostile buyer.
Lions Gate is the studio behind the Oscar-winning movie “Precious: Based on the Novel ‘Push’ By Sapphire.” It also owns the TV Guide network and produces television shows, including “Weeds” and “Mad Men.”
The company is headquartered in Vancouver, British Columbia, but has most of its operations in Santa Monica, Calif.
Google Opens Its Defense In Antitrust Case Alleging Monopoly Over Online Ad Technology
Google opened its defense against allegations that it holds an illegal monopoly on online advertising technology Friday with witness testimony saying the industry is vastly more complex and competitive than portrayed by the federal government.
"The industry has been exceptionally fluid over the last 18 years," said Scott Sheffer, a vice president for global partnerships at Google, the company's first witness at its antitrust trial in federal court in Alexandria.
The Justice Department and a coalition of states contend that Google built and maintained an illegal monopoly over the technology that facilitates the buying and selling of online ads seen by consumers.
Google counters that the government's case improperly focuses on a narrow type of online ads — essentially the rectangular ones that appear on the top and on the right-hand side of a webpage. In its opening statement, Google's lawyers said the Supreme Court has warned judges against taking action when dealing with rapidly emerging technology like what Sheffer described because of the risk of error or unintended consequences.
Google says defining the market so narrowly ignores the competition it faces from social media companies, Amazon, streaming TV providers and others who offer advertisers the means to reach online consumers.
Justice Department lawyers called witnesses to testify for two weeks before resting their case Friday afternoon, detailing the ways that automated ad exchanges conduct auctions in a matter of milliseconds to determine which ads are placed in front of which consumers and how much they cost.
The department contends the auctions are finessed in subtle ways that benefit Google to the exclusion of would-be competitors and in ways that prevent... Read More