The billionaire investor is seeking an order to prevent Rachesky from selling the shares or exercising voting rights attached to them, according to the lawsuit filed July 23 in the Supreme Court of British Columbia.
Icahn, 74, is trying to reverse the swap that hinders his hostile bid for the studio by putting more shares in the hands of opponents. The swap boosted Rachesky’s stake, the second- largest after Icahn’s, to 28.9 percent. Icahn has 33 percent.
“I find this scheme reprehensible,” Icahn said in an e- mailed statement today. “I will spare no expense in holding the culpable parties responsible for their behavior.”
A second lawsuit was filed today in New York State Supreme Court. Icahn said his $6.50-a-share tender offer will also continue.
“This case involves an unlawful sham transaction by which an incumbent board of directors, management and their co- conspirators sought to further entrench their own positions and to protect their personal interests in compensation and perks at the sole expense of their company,” according to Icahn’s New York complaint.
Icahn previously offered $7 a share for Lions Gate in a tender that ended June 30. He has criticized the company’s spending on films and said in June that he planned a proxy fight to replace management and the board.
Peter Wilkes, a Lions Gate spokesman, didn’t return a call seeking comment.
Last week, Lions Gate issued new shares to Rachesky’s MHR Fund Management LLC, putting 12 percent more of the stock in friendly hands and diluting Icahn’s holding. Rachesky, 51, increased his stake through a transaction in which one of his investment funds bought $100 million of convertible notes from Kornitzer Capital Management, then exchanged debt for stock.
Rachesky acquired 16.2 million shares in the exchange at a price of $6.20 each, Icahn said.
The studio, distributor of the “Saw” horror films and producer of the Emmy-winning “Mad Men” TV series, announced the Rachesky deal days after a 10-day truce with Icahn expired.
During the truce, the two sides discussed potential acquisitions and possible board seats for Icahn. The talks didn’t yield results that would merit an extension, Icahn said.
The case is Icahn v. Lions Gate Entertainment Corp., 651076/2010, Supreme Court, New York County (Manhattan).