Lions Gate Entertainment Corp. shareholders on Wednesday approved the studio’s shareholder rights plan, but the company still faces court opposition to implementing its strategy to thwart investor Carl Icahn’s tender offer.
The company, with headquarters in Vancouver, B.C., and the bulk of its operations in Santa Monica, said 55.7 percent of total shares voted in favor of the “poison pill” strategy, rising to 70.4 percent if the shares if the Icahn Group’s shares were excluded. More than 90 percent of shares outstanding participated in the vote.
“Today’s outcome demonstrates that … shareholders are serious about protecting the value of their investment in the company from financially inadequate, opportunistic and coercive offers such as the one made by the Icahn Group,” the company said in a statement. “We urge shareholders to continue to reject the Icahn Group’s offer by not tendering their shares, and for those who have, to withdraw them.”
Icahn has for months attempted to increase his stake to 30 percent in order to gain a seat on the board and more influence over the company, which he contends is following a poor growth strategy.
The company’s rights plan would prevent any investor from taking a stake greater than 20 percent by flooding the market with additional shares in order to dilute the acquirer’s acquisition.
Icahn convinced a Canadian court to agree to invalidate any shares issued under the plan, and an appeals court last week upheld that decision. Lions Gate said Wednesday that it was considering its options to fight the courts’ decisions. Getting the plan approved by a shareholders’ vote at least allowed the company to get their preference on record.
The vote in favor of company’s position was in line with management’s disinclination to accept Icahn’s $7 per share tender officer, which was to expire Monday. After less than 7 percent of shares had accepted the offer, Icahn extended his deadline until May 21.
Shares of Lions Gate were unchanged at $6.92 in early trading on the New York Stock Exchange.
