Icahn says Lions Gate win "virtually impossible"

By Sue Zeidler

LOS ANGELES (BestGrowthStock) – Carl Icahn said it would be “virtually impossible” to win board seats at Lions Gate Entertainment Corp’s annual meeting after a court denied his motion to block a big investor from voting his full stake.

But the billionaire activist shareholder vowed to aggressively protect his investment and urged shareholders to vote their dissatisfaction with the studio that is home to the hit television series “Mad Men,” at the annual meeting on Tuesday in Los Angeles.

“We recognize that it is now virtually impossible for us to prevail in the proxy contest due to the dilutive transaction in question. Nevertheless, we encourage shareholders to voice their dissatisfaction by voting for our slate of nominees,” Icahn said in a statement.

Last Thursday, Lions Gate scored a key court victory against its largest shareholder and hostile suitor, when a New York judge denied Icahn’s motion seeking an injunction to block Lions Gate’s second-largest shareholder, Mark Rachesky, from voting shares he got in a debt-for-equity swap in July.

Icahn, whose hostile $7.50-a-share takeover tender offer expired on Monday, had sought to unwind the Rachesky transaction that effectively diluted his stake from 38 percent to 33 percent. He said he would not buy any shares tendered in the offer because the bid had been conditioned on receipt of the injunction.

The matter is not entirely over, however. Icahn said on Monday he was pleased there would be a full trial on the issue in the next few months, requiring Lions Gate to hold another shareholder meeting in September.

Icahn recently scored some points with institutional investors due to reports issued by proxy advisory firms, which took the company’s financial performance to task.

Glass Lewis & Co last week urged shareholders to reject Icahn’s slate, saying the billionaire lacked a clear plan to revive the company. But it also cited the company’s cumulative net loss of about $274.6 million for the five fiscal years ended March 31, 2010 and said it paid its executives more than its peers but performed moderately worse.

Egan-Jones urged full support for Icahn’s slate, while ISS supported three of Icahn’s five nominees, saying the company’s performance over the past five years causes doubt about its pace toward profitability.

(Editing by Gerald E. McCormick)

Icahn says Lions Gate win "virtually impossible"