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.
Disney Pledges $15 million In L.A. Fire Aid As More Celebs Learn They’ve Lost Their Homes
The Pacific Palisades wildfires torched the home of "This Is Us" star Milo Ventimiglia, perhaps most poignantly destroying the father-to-be's newly installed crib.
CBS cameras caught the actor walking through his charred house for the first time, standing in what was once his kitchen and looking at a neighborhood in ruin. "Your heart just breaks."
He and his pregnant wife, Jarah Mariano, evacuated Tuesday with their dog and they watched on security cameras as the flames ripped through the house, destroying everything, including a new crib.
"There's a kind of shock moment where you're going, 'Oh, this is real. This is happening.' What good is it to continue watching?' And then at a certain point we just turned it off, like 'What good is it to continue watching?'"
Firefighters sought to make gains Friday during a respite in the heavy winds that fanned the flames as numerous groups pledged aid to help victims and rebuild, including a $15 million donation pledge from the Walt Disney Co.
More stars learn their homes are gone
While seeing the remains of his home, Ventimiglia was struck by a connection to his "This Is Us" character, Jack Pearson, who died after inhaling smoke in a house fire. "It's not lost on me life imitating art."
Mandy Moore, who played Ventimiglia's wife on "This Is Us," nearly lost her home in the Eaton fire, which scorched large areas of the Altadena neighborhood. She said Thursday that part of her house is standing but is unlivable, and her husband lost his music studio and all his instruments.
Mel Gibson's home is "completely gone," his publicist Alan Nierob confirmed Friday. The Oscar winner revealed the loss of his home earlier Friday while appearing on Joe Rogan's... Read More