The saying ‘Be careful what you wish for’ may apply to the news that Lionsgate ($LGF) will acquiesce to the demands of Carl Icahn and allow stockholders to vote on the poison pill.
Icahn’s stake is just below 20% and his intentions of owning more stock in the company have been thwarted thus far by this poison pill, a dilutive measure that companies like Lionsgate use to keep hostile acquirers at bay.
Now, the company has decided to put it to a vote* and the jury is still out as to whether Icahn will get the support of other voters. He is not the only large shareholder, after all.
*UPDATED April 26th 2010:
A representative at Lionsgate has clarified this bit of information:
From the beginning, when Lionsgate first announced that the Board had
implemented a Shareholder Rights Plan on March 12, 2010, it was
contingent on confirmation by shareholder vote at a Special Meeting of
Shareholders, which will be held on May 4, 2010.
On April 23, 2010, the Board amended the procedures for voting for the
Shareholder Rights Plan, so that the plan must now be confirmed by a
simple majority of all shareholders (originally, only shareholders
independent of the offeror were allowed to vote – now the Icahn Group
can vote at the meeting).
Paul Tharp writes in the New York Post:
Other investors include MHR Fund Management LLC, which has 20 percent; Capital Research Global Investors, with more than 10 percent; Steinberg Asset Management at slightly less than 7 percent; and billionaire Mark Cuban at more than 5 percent.
Meanwhile, leading proxy advisory firm Riskmetrics yesterday called for shareholders to oppose Lionsgate’s poison-pill proposal, saying, according to Icahn, that it gives the Lionsgate board too much discretion.
Riskmetrics’ opposition comes as Lionsgate said yesterday that rival proxy advisory firms Glass Lewis and Egan-Jones recommended shareholders vote in favor of the poison pill.
This looks like a tough one for Icahn with only 1 in 3 proxy advisory firms backing his assertion that the poison pill is anti-shareholder. The shareholders’ meeting and vote will be held on May 4th, so we shall see.