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.
Cinematographer Pepe Avila del Pino Discusses Residente’s “313,” Winning An ASC Award
Pepe Avila del Pino’s second career nomination for an American Society of Cinematographers (ASC) Award earned him his first win earlier this week in Los Angeles--for outstanding achievement in music videos on the strength of the Residente-directed “313” featuring performances by Residente, Sílvia Pérez Cruz and Penelope Cruz. The cinematic, stirringly beautiful “313” opens with Penelope Cruz narrating in Spanish, reflecting on the meaning of life and the passage of time. She is joined by ballet dancers who are said to represent time while Cruz represents life itself. The ethereal music video brings us the essence of time in our lives. Residente’s life and time are seemingly controlled, respectively, by Cruz and the dancers from the outset. But towards the end of the video, Residente starts to orchestrate his own time and life. What can’t be denied, though, is that time is fleeting as Cruz and Residente begin to disappear before our eyes. Avila del Pino, AMC, is best known for his work in television and features. In fact, his alluded to first ASC Award nomination came in 2018 on the basis of the TV pilot for The Deuce, directed by Michelle MacLaren. Over the past seven years, Avila del Pino has lensed select music videos--all for his friend, Residente (a.k.a. Rene Perez Joglar). The Residente videos have thus become passion projects, done out of “pure love” with the same close-knit team. The “313” song and video were especially personal to Residente in that they were both inspired by a friend who had died about a year earlier. To win an ASC Award for this particular project is most gratifying for Avila del Pino--not only because of the video’s significance to Residente, but also the deep feelings the DP has for the ASC.... Read More