In win for Icahn, Lions Gate poison pill voided [updated]
In a major blow to Lions Gate Entertainment’s efforts to fend off a takeover attempt by activist shareholder Carl Icahn, a British Columbia regulatory body has voided the “poison pill” that the Santa Monica-based independent studio had attempted to institute.
A panel of the British Columbia Securities Commission reportedly ruled that shareholders should be allowed to decide whether to take up Icahn’s offer of $7 per share, the regulatory body confirmed in a statement. [Updated at 4:37 p.m. with confirmation from the Commission.]
Icahn's offer expires April 30, this Friday. Lions Gate had scheduled a shareholder vote on the poison pill -- which essentially would make it impossible for the investor to take over the company -- for next Tuesday, May 4. It recently altered the terms of the pill to allow Icahn, who owns nearly 19% of Lions Gate stock, to vote his shares.
In testimony before the British Columbia Securities Commission Monday, Lions Gate Vice Chairman Michael Burns reportedly said that 61% of shareholders had voted for the poison pill out of the two-thirds of total eligible votes that had been cast.
The Santa Monica-based studio behind the recently released "Kick-Ass," as well as the "Saw" movies and television series "Mad Men" is domiciled in Vancouver, giving British Columbia authorities certain jurisdiction.
In a statement, the company said it was "disappointed' by the decision and that it is considering an appeal. Meanwhile, next week's vote on the poison pill will go forward and Lions Gate continues to advise that shareholders reject Icahn's tender offer.
After closing down 5% at $6.62 on Tuesday, Lions Gate stock shot up to $7.07 in after-hours trading on news of the poison pill ruling.
[Updated at 6:30 p.m. with Lions Gate response and stock information.]-- Ben Fritz