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Lions Gate appeals poison pill ruling, delays shareholder vote

April 28, 2010 |  7:12 pm

Lions Gate Entertainment is seeking to appeal the decision of a Canadian regulatory body to kill its "poison pill" plan that would make it all but impossible for activist investor Carl Icahn to raise his stake in the besieged independent film and television studio above 20%.

The British Columbia Court of Appeals will hear Lions Gate's application for permission to appeal on Monday. If the court grants permission, Lions Gate will then seek to overturn Tuesday's decision by the British Columbia Securities Commission to annul the poison pill.

Lions Gate, which operates in Santa Monica, is domiciled in Vancouver, giving local authorities there jurisdiction over the company.

The company is still going ahead with its planned shareholder vote on the pill but is delaying it in hopes of getting the BCSC ruling overturned ahead of time and ending uncertainty over whether the vote will even matter.

Originally scheduled for next Tuesday, May 4, the shareholder meeting in Vancouver to vote on the poison pill has been put off until May 12. That's two days before the final date on which shareholders can sell their stock to Icahn. The activist stockholder's $7-per-share tender offer expires Friday. However, if he gets enough participation by then to raise his stake to more than 50%, there will be a "subsequent offering period" that ends May 14 for shareholders who didn't initially want to sell but may feel compelled to if Icahn takes control.

"Lions Gate believes that there are shareholders who, without the protection of the Shareholder Rights Plan [the poison pill], may be coerced to tender into the offer," the company said in a statement. "The Company wants to provide shareholders an opportunity to obtain the information necessary to make an informed and non-coerced decision."

Icahn could also extend or change the terms of his tender offer before it expires at 5 p.m. Pacific time Friday.

-- Ben Fritz

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