MUMBAI: The board of Lions Gate Entertainment has straightaway rejected the latest tender offer from Carl Icahn to acquire all of its outstanding stock for $6.50 per share saying that the offer does not reflect the full value of the movie and television studio.
It also said that the timing was ‘opportunistic‘ because it comes at a time when a tough economic climate for media companies prevails. It also noted that the offer price was below Icahn‘s previous tender offer of $7 per share.
It may be noted that shares of Lionsgate closed Monday at $6.72 per share up 12 cents.
Last week, in a hope of unwinding a recent transaction in which the company issued stock to board member Mark Rachesky in a debt-for-equity deal, Icahn filed a suit against Lionsgate in the Supreme Courts of New York and British Columbia.
The action increased Rachesky‘s stake to just below 29 per cent from 20 per cent and diluted Icahn‘s holdings to 33.5 per cent from 38 per cent making it more difficult for him to take control of the company.
Last Wednesday, the British Columbia Securities Commission denied Icahn‘s request for a 15-day cease trading order that would have prohibited Rachesky from selling any of the stocks he acquired in the transaction or from buying more shares. The order would have also prevented Lionsgate from issuing any new stock.
