Tags: US | Lions | Gate | Icahn

Lions Gate Investors OK Tactic to Block Icahn Bid

Thursday, 13 May 2010 08:29 AM

Lions Gate Entertainment Corp. said Wednesday that 56 percent of its shareholders backed a plan that would block billionaire investor Carl Icahn's buyout bid, even though Canadian regulators have rendered the plan ineffective.

The niche movie studio said about 44 percent voted against the shareholders rights plan. Shareholders representing 91 percent of the outstanding shares cast votes.

Excluding the votes cast by Icahn and his affiliates, about 70 percent of shares voted in favor of the shareholder rights plan.

Icahn, in a statement, mocked that calculation. "It seems to me that there is nothing quite so desperate as contemplating how well you would have done if only those voting against you were not counted," he said.

He maintained that the substantial vote against the plan indicates that shareholders are dissatisfied with Lions Gate management.

The plan, which contains a so-called "poison pill," would make it nearly impossible for a hostile acquirer such as Icahn to increase his stake in the company above 20 percent by massively diluting the suitor's shares.

He has offered $7 for shares in the company in an attempt to boost his stake above his current holdings of nearly 19 percent. The company has called the offer too low.

Icahn extended the offer on Monday to expire on May 21. The offer already had been extended to Monday from April 30.

Icahn said at least 7.4 million shares, or about 6.5 percent of the shares, were tendered as of Monday.

Shares closed Wednesday trading down a penny at $6.91.

The British Columbia Securities Commission voided the plan last month, saying new shares that would dilute the acquirer's stake could not be traded. A provincial appeal court dismissed the company's appeal last week.

Lions Gate, based in Vancouver but operated out of Santa Monica, Calif., falls under the jurisdiction of the Canadian province of British Columbia.

The company, which is behind the recent mock superhero movie "Kick-Ass," thanked shareholders in a statement, and said it continues to evaluate its options regarding the B.C. panel's decision.

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