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Carl Icahn Spars with Lions Gate Chair

As Lions Gate Entertainment prepares for its annual meeting next Tuesday, vice chairman Michael Burns sparred with activist investor Carl Icahn over a potential transaction that would combine the studio with Metro-Goldwyn-Mayer.

With a 32 percent stake in Lions Gate , Icahn is the studio's largest shareholder and also a debt holder in MGM. Icahn threatened a proxy battle in the past, but has recently advocated a merger between the two studios. He has, however, said that MGM creditors do not want a deal with Lions Gate's current management, including Burns.

But Burns dismissed the criticism, calling Icahn "the king of flip-flops."

"He likes me somedays. He dislikes me others," Burns said, adding that Icahn is chiefly interested in the math involved, being as he owns 32 percent of Lions Gate and 18 percent of MGM. "I think when the math makes sense to Carl, he'll be very proactively thinking this is the greatest idea of all-time and when it doesn't, he'll be against the deal."

Burns argued that when Icahn secures a board position on a company, he tends to "destroy" shareholder value. Since 2000, nine of 14 companies whose boards he's served on have seen median declines of 31 percent, Burns said. His performance on non-biopharma companies is worse with a median decline of 82 percent.

Icahn fired back, calling the numbers "slanted." When he goes into a board and the company is already in free fall, as was the case with both Motorola and Yahoo!, Icahn said things aren't going to turn around right away. He explained it takes months, if not a year, for results to become apparent.

Burns said Icahn often complains about how Lions Gate is run, but doesn't offer a plan of his own. He also hasn't heard of any shareholders joining in Icahn's fight.

To that, Icahn said Lions Gate should be focusing on distrubution. Instead of producing movies, he thinks it should acquire festival-winning films and then distribute them, as a way to cut costs and improve efficiency.

Icahn added that many shareholders support him because they're "sick and tired" of how Lions Gate operates.

Much of the debate between Icahn and Burns has played on out CNBC's "Fast Money." To see what happened last time they both appeared on the program, see this story.

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