Earlier thwarted by Canadian courts, Lions Gate Entertainment Corp. has adopted another shareholder rights plan as part of its effort to block a hostile takeover by billionaire investor Carl Icahn.
The Santa Monica studio, which has corporate headquarters in Vancouver, British Columbia, late Thursday said that its board had adopted the so-called "poison pill," plan so that other shareholders could buy extra shares at a deep discount if any one shareholder, such as Icahn, accumulated 38 percent or more of Lions Gate's outstanding common shares.
Under the new rights plan, one share purchase right will be issued and attached to each outstanding common share of Lions Gate as of the close of business on July 12.
Icahn by his June 30 deadline accumulated 33.9 percent of Lions Gate shares through a $7-a-share tender offer, becoming the company’s single largest shareholder. His stake still leaves him short of a controlling interest, but he can block company decisions that require a two-thirds shareholder approval.
The company said it designed the current plan to avoid issues that concerned the Canadian courts. Icahn earlier this year successfully appealed an earlier Lions Gate shareholders rights plan -- approved by shareholders themselves -- that would have triggered at a lower level of shares. He is expected to also fight the current plan.
Shares were down 19 cents, or 2.6 percent, to $6.96 in midday trading on the New York Stock Exchange.
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