Lions Gate Entertainment Corp. late Wednesday said it has appealed a Canadian stock market regulator's decision to block the studio's potential use of a "poison pill" to thwart Carl Icahn’s unfriendly takeover effort.
The British Columbia Securities Commission on Tuesday decided it that if a poison pill, or stockholder rights plan, was approved by Lions Gate shareholders at a May 4 special meeting, the commission would halt trading of any securities issued under the plan, thus rendering it ineffective.
The commission is the securities regulator in British Columbia. Lions Gate’s corporate headquarters is in Vancouver, B.C., although most of its operations are in Santa Monica.
Lions Gate said it filed an application with the British Columbia Court of Appeal for leave to appeal the commission’s decision to cease trade the Lionsgate Shareholder Rights Plan, which shareholders were set to vote on next week. The application is scheduled to be heard by the court on May 3.
The company's board rescheduled the shareholders meeting from May 4 to May 12.
“The company believes that its shareholders’ right to vote is paramount," the company said in a statement. "The BCSC’s decision regarding the shareholder rights plan should have been withheld until ... shareholders had the opportunity to consider and to vote at the special meeting."
Lions Gate has twice rejected tender offers from Icahn, whose investment firm has accumulated a 19 percent stake in the group and wants nearly 30 percent. His most recent offer was for $825 million, or $7 a share.
Lions Gate’s plan would discourage unfriendly bids by allowing the company to issue new shares and massively dilute the shares of any hostile bidder whose stake exceeds 20 percent.
Icahn earlier praised the commission's decision, saying the ruling was "consistent with its vision to play a leading role in securities regulation that inspires investor confidence."
Shares earlier closed up 25 cents, or nearly 4 percent, to $6.87 on the New York Stock Exchange.
For reprint and licensing requests for this article, CLICK HERE.
Stories You May Also Be Interested In
- Lot of Roar, Little Bite in Lions Gate ‘Poison Pill’
- Lions Gate Tries Another Poison Pill
- Lions Gate Loses Appeal on Icahn Poison Pill
- Lions Gate Shareholders Approve Poison Pill
- Lions Gate Dilutes Icahn’s Stake
- Icahn Sweetens Offer for Lions Gate
- Lions Gate Rejects Icahn’s Offer
- Lions Gate Narrows Loss