Icahn Ramps Up Offer to Buy Lions Gate Shares

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Billionaire investor Carl Icahn upped the stakes Friday in his bid to control Lions Gate Entertainment, offering to purchase up to all of the Santa Monica film studio’s outstanding shares.

The renewed offer comes exactly one week after the board of the independent film studio rejected Icahn’s earlier bid to purchase up to 13.2 million shares and passed a poison pill to discourage further attempts.

Icahn already owns 18.9 percent of outstanding shares and buying another 13.2 million shares would increase his stake to about 30 percent and make him the company’s largest single shareholder.

The poison pill is triggered whenever any shareholder seeks to buy more than 20 percent of the stock and creates additional shares that dilute the stock. Icahn’s offer to buy all outstanding shares would circumvent the plan.

The board has called Icahn’s offer of $6 per share “financially inadequate and coercive” and “an effort to acquire control of Lions Gate without paying a control premium.” Icahn latest offer also is at $6 per share.

Icahn issued a statement Friday that decried the board’s tactics.

“I am dismayed that Lions Gate’s board of directors chose to implement a poison pill and thus deny their shareholders the … opportunity to participate in our offer,” the statement said. “I believe these tactics serve only to strip shareholders of an opportunity and entrench management. … We therefore intend, if our offer is successful, to replace Lions Gate’s board of directors with our nominees.”

Lion’s Gate, which produces and distributes films and TV shows, and owns the TV Guide cable channel, has corporate offices in Vancouver, B.C., but most of its operations are local.

In mid-day trading, Lions Gate shares sold for $6.08, up 11 cents or 2 percent, since the close on Thursday.

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