Carl Icahn gets key Canadian approval for Lions Gate bid
Carl Icahn's bid to take control of Lions Gate Entertainment moved another step forward Wednesday as the minister of Canadian heritage approved Icahn's tender offer.
Because Lions Gate is legally domiciled in Canada -- though it operates out of Santa Monica -- Icahn needed permission from the Canadian government to take over the company, which he is attempting to do with a $7-per-share bid that expires June 16.
Along with the approval, Icahn pledged that Lions Gate's Canadian distribution subsidiary, Maple Pictures, would remain under Canadian control. He didn't say whether he would sell Maple Pictures, though last week he told The Times that he intended to do so.
The activist investor also said his investment firm was "committed to keeping Lions Gate in Canada and maintaining or increasing the level of film production undertaken by Lions Gate in Canada."
Icahn's offer, which has been extended three times, allows him to acquire any of the film and television studio's stock beyond the nearly 19% that he already owns. Even if he doesn't take full control, growing his stake to more than 20% or above 30% would allow Icahn to exercise increasing levels of control over the company's operations and to potentially pressure management into giving him representation on the board of directors.
Icahn said last week he will wage a proxy battle to take over the studio's board.
Lions Gate declined to comment on Wednesday's news except to remind shareholders that its board continued to oppose Icahn's offer as financially inadequate and coercive. The company also pointed out that since Icahn announced his original offer in March, less than 4% of Lions Gate's outstanding shares had been tendered.
After Icahn's offer expires June 16, there will be an additional 14 days for shareholders who have not yet tendered to do so in light of how much stock Icahn has accumulated.
However, Icahn stated Wednesday he would not extend his bid again or increase his offer price of $7 per share.
-- Ben Fritz