Lions Gate

6/22/10 - Lions Gate said it received the consent of its lenders to increase the change of control trigger on its $340 million revolving credit facility, removing a risk of default for now.

The trigger was raised to 50% from 20%. Other terms were unchanged.

Getting that waiver was key as Icahn said 13% of Lions Gate shares were tendered in response to his months-long takeover offer, boosting his stake in the filmed-entertainment producer's stock to 32%. Investors still have until the end of the month to tender to a subsequent offering at the same $7 price as the tender was.

With his boosted stake, Mr. Icahn's influence over Lions Gate is likely to increase, but the result also suggest a critical mass of investors, including several of the company's major institutional shareholders, have resisted Icahn and may continue to block his attempts to control the last independent, publicly traded film studio in Hollywood.

6/16/10 - Carl Icahn said that 12.5 percent of Lions Gate shares were tendered after his $7 a share offer, effectively giving him a 31 percent stake in the studio.

Under the terms of Lions Gate's $340 million credit facility, any investor gaining more than 20 percent of the studio could trigger a technical default.

Lions Gate said it was in discussions with lenders to seek a waiver or amendment to its credit facilities to prevent any default, and that it was confident in its ability to obtain one in the near future.

6/15/10 - The Lionsgate-Carl Icahn feud has turned nasty. Vancouver-based Lionsgate in a letter to investors said the activist shareholder has a history of "value destruction and self-serving actions" after Icahn warned of a possible bankruptcy at the mini-studio.

Lionsgate lashed out at Icahn comes as the billionaire investor's current $7-per-share tender will expire tomorrow.

The mini-studio pointed to publicly traded companies like Blockbuster, WCI Communities and BKF Capital that allegedly saw their share value plunge after Icahn secured board representation or operational control.

"In addition to our concerns about Carl Icahn's record of value destruction, Mr. Icahn's involvement on the board of directors of Blockbuster specifically underscores serious questions about his obvious lack of knowledge and understanding of the media business," Lionsgate added.

The mini-studio even pointed to Icahn's flagship fund, Icahn Enterprises, having apparently fallen 71% in value to $38.74 from a 2007 high.

The mini-studio also opened up on Icahn's movie production and distribution track record with Stratosphere Entertainment, launched in September 1997 with Paul Cohen.

"After 18 months of losing money, Mr. Icahn replaced Mr. Cohen with Richard Abromowitz, and Stratosphere continued to deliver boxoffice failures" before it was shuttered in 2000, Lionsgate recounted.

The lesson, the letter to shareholders added, was tendering Lionsgate shares to Icahn invites the same fate.

In his own scathing open letter to shareholders, Icahn branded Lionsgate's current senior management as "an abject failure," and pledged to replace the current board of directors with his own slate of representatives via a proxy fight.

Icahn added the current Lionsgate board was "dangerously detached from reality," and that the mini-studio was "racing down the wrong road at breakneck speed toward a precipice."

5/19/10 – Lionsgate reported that Tiger Gate, its Asian joint venture with Saban Capital, signed an agreement with Singapore's Media Development Authority to produce movies for distribution within Asia.

Tiger Gate will launch five films over the next two years with a budget of about $3-$5 million each, primarily for its own channels KIX and Thrill.

Meanwhile, back at the ranch, Lions Gate has refused to accept Icahn's offer of $7/share, which they say "undervalues" the company.

4/15/10 - Carl Icahn turned up the heat on Lions Gate by raising his offer to buy the film company, just weeks before shareholders will vote on a measure designed to thwart the billionaire activist's advances.

Icahn, who already owns about 18% of the company, is now offering $7 a share, up from $6, for the remainder. The new offer values the company at some $825 million.

Lions Gate issued a statement saying its board will evaluate his new offer. The company is legally restricted from commenting beyond that until it completes a formal evaluation process, but it will likely oppose the offer. It has previously noted that the average Wall Street analyst valuation of Lions Gate is $8.70 a share.

Separately, billionaire entrepreneur Mark Cuban disclosed he now holds a 5.4% stake in Lions Gate.

Lions Gate shareholders will vote May 4 in Toronto on the so-called poison pill measure the company recently adopted as a way to block Mr. Icahn from increasing his stake beyond a 20% threshold. Icahn is the second-largest holder of Lions Gate stock behind his former lieutenant, Mark Rachesky of MHR Fund Management, who owns 19%.