Dear 'Visionary CEO' of Lionsgate,

The below is Carl Icahn‘s letter to Lionsgate ($LGF) management.  It was released this morning.

***

CARL C. ICAHN

767 Fifth Avenue, 47th Floor

New York, New York  10153

March 24, 2010

Lions Gate Entertainment Corp.

2700 Colorado Avenue, Suite 200

Santa Monica, California  90404

Attention:  Jon Feltheimer, Co-Chairman and Chief Executive Officer

Dear Jon,

I found several aspects of your statement yesterday of great concern. To say
that you have exhibited a “patient, disciplined strategy of building a strong
and diversified company step by step over the past 10 years” is  absurd. In
actuality, most of the stock’s appreciation during the decade was the result
of one transaction – the acquisition of Artisan. In the press release
announcing that acquisition, Artisan CEO  Amir Malin  stated, “We enter 2004
with our strongest theatrical slate ever.” After the acquisition, Lions Gate’s
stock reached a high of  $11.40  on  November 10, 2004. But when the pipeline
acquired from Artisan ran out, for several years the stock went nowhere, and
then in September of 2008 it began its precipitous decline to a low of  $4.85
on  February 4, 2010. I believe the stock would have continued declining if I
had not acquired 1,236,938 shares between  February 5, 2010  and  February 11,
2010  and then announced a tender offer on  February 16, 2010. You claim that
I offer no “meaningful vision”, thereby implying that you have one. I cannot
help but wonder why your “vision” – if so “meaningful” – never translated into
shareholder value?

I believe that one of my strongest traits as an investor is that I don’t
personally claim to be a visionary in regard to any particular industry. I
believe in finding strong managers and holding them accountable. If the stock
price of a company remains stagnant for years, as it has with Lions Gate, then
clearly something is wrong. I suggest that your directors have failed
shareholders. They have never taken a long hard look at this “meaningful
vision” you claim to possess and have not been willing to hold you accountable
for it. Instead, they have rewarded you and the rest of management with
bonuses, options and golden parachutes while your shareholders have watched
their stock decline.

Unfortunately, as is often the case, hand-picked boards let self-proclaimed
“visionary” CEOs chase their vision indefinitely, even when years pass and
their vision is clearly a delusion. To make matters worse, I continue to fear
(as I have previously expressed) that the current board will allow you to
borrow billions to pursue your new “vision” of library consolidation,
exhibited by your interest in acquiring MGM and Miramax. This is simply
another delusion in my opinion, as library values are currently in a secular
decline, never to return to cash flows seen during the heyday of DVD sales.

I believe that you are, as you should be, frustrated by the five-year
stagnation of Lions Gate. But more importantly, I am fearful that you have
determined to “swing for the fences” using excessive debt and risking the
shareholders’ equity.  The road to bankruptcy is littered with companies whose
CEOs – under the banner of “vision” – have been permitted by lax board
oversight to gamble their companies into oblivion.

Sincerely yours,

Carl C. Icahn

THIS PRESS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE
AN OFFER TO PURCHASE NOR A SOLICITATION FOR ACCEPTANCE OF THE OFFER DESCRIBED
ABOVE. THE OFFER IS BEING MADE ONLY PURSUANT TO THE OFFER TO PURCHASE DATED
MARCH 1, 2010, AS AMENDED BY THE NOTICE OF VARIATION AND EXTENSION DATED
MARCH 19, 2010, THAT THE ICAHN GROUP DISTRIBUTED TO HOLDERS OF COMMON SHARES
AND FILED WITH THE SEC AS EXHIBITS TO ITS AMENDED SCHEDULE TO AND WITH THE
CANADIAN SECURITIES AUTHORITIES ON SEDAR. HOLDERS OF COMMON SHARES SHOULD READ
CAREFULLY THE OFFER TO PURCHASE AND THE NOTICE OF VARIATION AND EXTENSION
BECAUSE THEY CONTAIN IMPORTANT INFORMATION, INCLUDING THE VARIOUS TERMS OF,
AND CONDITIONS TO, THE OFFER. HOLDERS OF COMMON SHARES MAY OBTAIN A FREE COPY
OF THE AMENDED SCHEDULE TO, THE OFFER TO PURCHASE, THE NOTICE OF VARIATION AND
EXTENSION AND OTHER DOCUMENTS THAT THE ICAHN GROUP WILL BE FILING (1) WITH THE
SEC AT THE SEC’S WEB SITE AT  WWW.SEC.GOV  AND (2) WITH THE CANADIAN
SECURITIES AUTHORITIES ON SEDAR AT  WWW.SEDAR.COM. SECURITY HOLDERS ARE
ADVISED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE
SOLICITATION OF PROXIES BY CARL C. ICAHN AND HIS AFFILIATES FROM THE
SHAREHOLDERS OF LIONS GATE FOR USE AT ITS UPCOMING ANNUAL GENERAL MEETING OF
SHAREHOLDERS, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION, INCLUDING INFORMATION RELATING TO THE PARTICIPANTS IN SUCH PROXY
SOLICITATION. WHEN COMPLETED, A DEFINITIVE PROXY STATEMENT AND A FORM OF PROXY
WILL BE MAILED TO SHAREHOLDERS OF LIONS GATE AND WILL ALSO BE AVAILABLE AT NO
CHARGE AT THE SEC’S WEB SITE AT  WWW.SEC.GOV  AND ON SEDAR AT  WWW.SEDAR.COM.
INFORMATION RELATING TO PARTICIPANTS IN SUCH PROXY SOLICITATION IS CONTAINED
IN THE AMENDED SCHEDULE TO FILED WITH THE SEC AND SEDAR ON  MARCH 19, 2010.

SOURCE   Carl C. Icahn

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