Lions Gate Said to Have Sought Buyers for Icahn’s 33% Stake in Film Studio

Lions Gate Entertainment Corp. (LGF), seeking to end a two-year fight with its largest shareholder, sought potential buyers for Carl Icahn’s one-third stake earlier this year, people with knowledge of the situation said.

The film and TV studio held discussions with interested parties as recently as February, said three people, who asked not to be named because the talks are private. Icahn, who sought control of Lions Gate for two years, has periodically met with potential suitors, one person said, declining to name them.

Efforts to buy out the 75-year-old billionaire have been sporadic and price is an obstacle to any transaction, three people said. Icahn, who owns about 33 percent of Lions Gate, paid an average of about $6.90 a share and is unwilling to sell at a loss, said two people.

Lions Gate, run from Santa Monica, California, lost 15 cents to $6.13 yesterday in New York Stock Exchange composite trading. The shares have declined 5.8 percent this year. At that price, Icahn’s 44.6 million shares are valued at about $273 million.

The Vancouver-based producer of cable TV’s “Mad Men” and distributor of the “Saw” horror films has fended off several attempts by Icahn to wrest control and is seeking ways to end the standoff, four people said.

Peter Wilkes, a Lions Gate spokesman, declined to comment.

Lions Gate management, led by Chief Executive Officer Jon Feltheimer and Vice Chairman Michael Burns, has kept the investor at bay with help from board member and ex-Icahn protégé Mark Rachesky, whose MHR Fund Management holds 29 percent.

Icahn’s most recent $7.50-a-share buyout offer ended in December. He lost a proxy vote in December to elect five board nominees after a New York judge ruled Rachesky could vote shares acquired in a deal that diluted Icahn’s stake.

Icahn lost an appeal on May 10 in British Columbia to overturn the Rachesky deal. A New York State Supreme Court judge dismissed a similar action in March.

To contact the reporters on this story: Ronald Grover in Los Angeles at rgrover5@bloomberg.net; Jonathan Erlichman in New York at Jerlichman1@bloomberg.net.

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.