Lionsgate Begs Shareholders To Beware Of Carl Icahn's "Self-Serving Agenda" And Star-Studded Posse

carl icahn

Lionsgate sent a letter to investors today, begging them to not succumb to Carl Icahn’s cajoling to increase his control of the media company.

Icahn, who owns a third of the company’s stock, is nominating five rebel nominees at the impending Annual General Meeting, and the current Lionsgate rulers are obviously freaking out.

Liongate tells its shareholders to trash any “proxy materials” they get from the Icahn team, and that the Icahn group has no vision and no strategy.

“Do not risk the future of your Lionsgate investment,” the note warns shareholders ominously, “Time is of the essence.”

From the letter:

Dear Fellow Lionsgate Shareholder:

Your Board and management team strongly believe that Lionsgate’s results over the past year underscore the success of its strategy to deliver value to shareholders by achieving strong and consistent growth…

On the other hand, the Icahn Group has not articulated a vision, much less a strategy, for Lionsgate…  Instead, the Icahn Group’s self-serving agenda stands to take away from the value of your investment.       

The board is obviously hoping their pleas will encourage shareholders to vote for their chosen nominees at the AGM, instead of Icahn’s star-studded crew, which includes former MGM COO Chris McGurk, former Bertelsmann exec Michael Dornemann, Icahn Enterprises president Daniel Ninivaggi and former Princeton President and economics professor Harold Shapiro.

Now, Lionsgate says, is “certainly not the time to make a change,” especially since the aforementioned Icahn stooges “lack a clear direction… and could impair the value of [shareholder’s] investment in Lionsgate by deviating from the board’s proven strategy.”

The current board should focus more on its achievements, rather than just slurring their rival in the hope it will petrify shareholders into maintainging the incumbent administration:

  • Lionsgate stock appreciated by 341%, as the S&P simultaenously declined 10% and the S&P 500 Media Index declined 33%. 
  • YTD, Lionsgate stock appreciated by 49% 
  • Company achieved record EBITDA and revenues in fiscal 2010.
  • Revenues grew from $183 million in fiscal 2000 to an approximate $1.6 billion in fiscal 2010
  • Achieved unprecedented year at the box office: “Our feature film slate generated more than half a billion dollars at the North American box office during the 2010 calendar year –  a company record.”

Icahn’s hostile takover was already rejected by shareholders, but obviously he is not willing to give up yet. Now he’s just attempting a coup from the inside.

Here’s the full Lionsgate Investor Letter >

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