By David Poland poland@moviecitynews.com
I Love This Game… (I)Cahn He Mate His Lions?
Word from LAT today that Carl Icahn is upping his effort to buy MGM debt at a better price than is in the current plan, but still a giant discount over the valuation of just a few years ago. He’s willing to pay 53 cents vs the 45 cents currently proposed.
And this is when it gets fun. Because after Lionsgate’s current management worked to build a bridge to Icahn and to promote LGF offering a merger, not only has Icahn taken the bait… he’s clearly positioning himself to be completely in control.
As I wrote yesterday, as things go today, Icahn would have about a third of The Merged Lion if the deal went through today. But he’s looking to nearly double the MGM that was reported just days ago, which would put him at about 28% ownership in the The Merged Lions via MGM and another 13.5% of so via his LGF position. Of course, these estimates are based on a variety of reports floating around, so 41.5% could be real… it could be closer to 50+%. Or perhaps he doesn’t need that much. Perhaps a bigger stake in MGM would lead to a couple more seats on the 11 person board of directors and more control from there.
But it has to be about control, doesn’t it? He hasn’t liked where Lionsgate leadership has taken that company in the last couple of years. He certainly can’t be thrilled with recent MGM management. So ask yourself… is Carl Icahn going deeper into this morass in order to have another management team – whether the current group at LGF or anyone else – tell him how the business should be focused? At 40%+ ownership? No way.
The plot gets thicker every day.