Carl Icahn is showing no sign of retreating in his effort to take control of Lions Gate Entertainment. He told today's (Wednesday) Los Angeles Times that he is extending his offer to buy shares in the company at $7.00 each and at the same time is dropping his stipulation that for his offer to take effect he must be able to increase his stake in the company to more than 50 percent. He currently owns 19 percent. If he is able to raise it by just 2 percent, Lions Gate would default on terms of a $340-million revolving credit facility, forcing it perhaps to find a new investor to pay back that debt. Icahn told the Times that Lions Gate management had spent $163 million in general and administrative costs in the last year "which is reprehensible for a company of this size." He faulted the current board for not holding management accountable for such spending. "We have lost confidence in the management and the board and therefore plan to have a proxy fight," Icahn vowed. Lions Gate ordinarily holds its annual shareholders meeting in Canada in September. Icahn indicated that if his own slate of directors is elected, he intends to keep the parent company in Canada and operate it from there. Currently the company is based in Vancouver but operates out of Santa Monica. In a conference call with analysts today (Wednesday), Lionsgate CEO Jon Feltheimer all but ignored Icahn's remarks. He thanked shareholders for rejecting Icahn's latest offer, saying that "they clearly understand the real story All of our businesses are performing well, our momentum is strong, and our trajectory is positive."

02/06/2010