According to Bloomberg’s Michael White and Andy Fixmer , Carl Icahn is Seeking to boost his stake in Lion’s Gate Entertainment to 30%:
“Carl Icahn offered to buy as many as 13.2 million shares of Lions Gate Entertainment Corp. for $6 each, a move that would make him the largest shareholder at almost 30 percent.
The offer by Icahn, who owns 19 percent, also includes a condition seeking to block Vancouver-based Lions Gate, maker of the “Saw” films, from undertaking acquisitions of more than $100 million, according to a statement from the investor today.
The offer would move Icahn, who turns 74 today, ahead of Lions Gate board member Mark Rachesky, currently the largest shareholder at 19.7 percent, according to data compiled by Bloomberg. Icahn may be seeking to prevent the studio from buying Metro-Goldwyn-Mayer Inc. or Walt Disney Co.’s Miramax, which are for sale, said David Joyce, an analyst at Miller Tabak & Co. in New York.
“Icahn did not favor their buying TV Guide Network last year, as they were using a lot of credit line capacity to do so,” Joyce said in an e-mail.
Icahn, who turns 74 today, said in the statement that he won’t withdraw his tender offer if a change-of-control provision in the company’s loan agreements triggers a default or acceleration in payments. A call to his New York office wasn’t returned.
If Icahn triggers a default, the studio could obtain a waiver from lenders, prepay its loan or eliminate the senior revolving credit facility, according to the statement from the investor.
Lions Gate had drawn $12 million of its $340 million secured revolving credit facility at the end of 2009, according to a Feb. 9 regulatory filing. Lenders can declare a default if a shareholder passes 20 percent ownership, or if board control changes in certain ways.
The studio, run from Santa Monica, California, urged shareholders in a statement not to take any action until the company makes a recommendation on Icahn’s offer.
Lions Gate gained 25 cents to $5.48 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have fallen 5.7 percent this year.
Rachesky is co-founder and president of New York-based MHR Fund Management LLC.
Lions Gate films have taken in $70.4 million in U.S. ticket sales this year, according to Box Office Mojo, a film researcher based in Sherman Oaks, California. The company has released three films and has seven others planned for this year, according to the Box Office Mojo Web site.
Morgan Stanley is advising Lions Gate on the tender offer and Wachtell, Lipton, Rosen & Katz is legal adviser, the studio said.”
~Sourced by I.S.