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Lions Gate shareholders approve poison pill voided by Canadian authorities [updated]

May 12, 2010 |  9:17 am

In a largely symbolic vote in support of the company's management, 56% of Lions Gate Entertainment shareholders have voted to approve a poison pill that would essentially block activist investor Carl Icahn from taking over the company.

Excluding Icahn, who owns almost 19% of the company's stock, 70% of shareholders approved the poison pill.

Santa Monica-based Lions Gate, the studio behind the Tyler Perry films and "Mad Men," announced the results at a special shareholders meeting held Wednesday in Toronto.

Regulatory authorities in British Columbia, where Lions Gate is legally domiciled, have already voided the proposed poison pill, a decision recently upheld by an appeals court. It remains to be seen whether Lions Gate will try again to overturn the annulment with authorities there. If it does, the studio will undoubtedly use Wednesday's vote as evidence on its side.

Regardless of whether the pill is ever enacted, Lions Gate management touted the vote as ammunition in its ongoing public war with Icahn, who is offering $7 per share in a hostile takeover offer. To the extent that the poison-pill vote served as a referendum on Icahn's hostile bid, Lions Gate appears to have most shareholders on its side.

"Today’s outcome demonstrates that Lions Gate shareholders are serious about protecting the value of their investment in the Company from financially inadequate, opportunistic and coercive offers such as the one made by the Icahn Group," the company said in a statement.

Last week, Icahn extended the expiration of his tender offer for a second time, to May 21, after less than 6.5% of shareholders offered to sell to him. It remains to be seen whether he will maintain his current offer, raise the price or relaunch the offer with a lower threshold. Currently, his tender only applies if he is able to buy enough shares to take over the company, after which he has said he would cut costs and replace management.

If he attracts enough interest to build up a larger minority share, Icahn may be able to pressure Lions Gate management to strike a deal giving him seats on the company's board of directors.

[Update, 1:38 p.m.: In a statement, Icahn said he was pleased that 44% of shareholders voted against the pill. "The substantial vote against the poison pill indicates... that many shareholders are dissatisfied with Lions Gate management," he said.

-- Ben Fritz

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