Icahn Eaten by Lions at the Gate (LGF)

Lions Gate Entertainment Corp. (NYSE: LGF) has just told Carl Icahn what he probably knew was coming but did not want to admit about his buyout offer.  The company’s shareholders have rejected Icahn’s $7.00 cash per share offer.  Icahn Group’s offer failed to receive its minimum number of shares and was extended to 8:00 p.m., New York City time, on May 21, 2010.  Here is the kicker, and Icahn even admitted that shareholders would ultimately decided: the company said that fewer than 6.5% of the outstanding shares were tendered.

Quotes from the company say”…offer is inadequate and does not reflect the value of their investment…”  The company even noted that those who did tender their shares were advised to withdraw the shares tendered.

The board of directors (and it seems holders as well) continues to maintain that Icahn’s offer is “financially inadequate, opportunistic and coercive and is not in the best interest of Lionsgate, its shareholders or other stakeholders.”

The shareholders special meeting to ratify the Shareholder Rights Plan will take place at 10:00 AM ET on May 12, 2010 at the Four Seasons Hotel in Ontario, Canada.  Further noted was that shareholders may submit their proxies until the conclusion of voting at the Special Meeting.  Its notice:

• The Board recommends that Lionsgate shareholders protect the value of their Lionsgate investment by NOT tendering their shares and by withdrawing any shares previously tendered into the Icahn Group’s offer.  The Board also recommends that shareholders vote FOR the approval of the Shareholder Rights Plan at the Special Meeting.

Lions Gate shares are up almost 5% at $6.88 before the close, but on rather thin trading volume.  If Icahn wants to make this much noise, perhaps going after efforts where a few times more than 6.5% can probably be secured up front might be a better idea.  Sometimes activist investors need activist consultants in their own activism.

JON C. OGG