Carl Icahn said late Tuesday that he’s willing to pay roughly $79 million to increase his stake in Lions Gate Entertainment Corp. It is activist investor’s latest attempt to gain greater control over the independent studio.
Icahn, who through his Icahn Group holds about 18.9 percent of common shares of the film and TV studio, said he will offer $6 per share in cash for up to 13.2 million outstanding shares. If enough shareholders take his offer, his stake in the company could grow to nearly 30 percent.
The announcement was made just before the close of trading and shares closed up nearly 5 percent to $5.48 on the Nasdaq.
The billionaire investor has been adding to his position since late 2008, but earlier attempts to gain enough shares to gain a seat on Lions Gate’s board – including an offer late last year accumulate the company’s convertible bonds – have fallen short.
The offer comes as the studio is said to be considering a bid for either the struggling Metro-Goldwyn-Mayer Inc. studio or the Miramax Films division of Walt Disney Co.
Analyst James Marsh of Piper Jaffray & Co. told the Associated Press that Icahn timing could be an effort to inhibit the company from making such a large investment. “Icahn's tender is conditioned upon them not doing a material transaction,” Marsh said. “The whole point of it is to slow that process down.”
Lions Gate, in a statement, acknowledged Icahn’s unsolicited offer and said its board would review the proposal. It urged shareholders not to take any action until it had time to make a recommendation. The board and management have opposed Icahn earlier overtures.
Lions Gate’s corporate headquarters are in Vancouver, B.C., but its main operations are in Santa Monica.
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