The British Columbia Securities Commission today declined to issue an order that would prevent Lions Gate board member Mark Rachesky from selling any of 16.2 million shares he acquired in a debt-for-equity swap.
Icahn, 74, is trying to reverse the swap, which 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. The case should be heard in court, the panel said.
“We are pleased with the British Columbia Securities Commission’s decision to dismiss the Icahn Group’s application for a cease trade order against Lions Gate,” the company said in an e-mailed statement.
Icahn, who also filed lawsuits in New York State Supreme Court and in Canada, is offering $6.50 a share for Lions Gate, distributor of the “Saw” horror films and producer of the “Mad Men” TV series. His New York office didn’t respond to a request for comment after normal business hours.
Last week, Vancouver-based 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 by buying $100 million of convertible notes from Kornitzer Capital Management, then exchanging debt for stock.
Kornitzer today reported holding 2.74 million shares of the independent film studio. That represents an increase from the 1.99 million shares Kornitzer held as of June 30, according to data compiled by Bloomberg.
Lions Gate, run from Santa Monica, California, fell 21 cents to $6.79 today in New York Stock Exchange trading. The shares have gained 17 percent this year.