Lionsgate Wins Board Battle vs. Icahn
By: Lionsgate's annual shareholder meeting yielded a big win for the studio — all 12 of its directors were elected and none of Icahn's five nominees.
This is not unexpected — Icahn controls 33 percent of Lionsgate shares and none of the company's major institutional shareholders switched alliance from Lionsgate to Icahn.
But Icahn did get the support of two major proxy services — Eagan-Jones backed all five of Icahn's nominees while Institutional Shareholder Services backs three of them, saying "change is needed in the boardroom"
Icahn Enterprises President Daniel Ninivaggi, one of Icahn's proposed directors, weighed in right after the vote. He said the fact that Icahn's directors "came up short" is a direct result "of the insider stock transaction." Ninivaggi says that he believes "Icahn's slate would have won handily if Lionsgate had not diluted Icahn's shares" — a dilution that Icahn is currently contesting in court. Icahn will continue to pursue litigation in Canada and New York, saying "the next shareholder meeting is only 10 months away." Ninivaggi went further, calling the election of Lionsgate's slate is "a direct result of bad corporate governance."
Lionsgate shares continue to tumble — it dropped 4.7 percent yesterday and fell another 7 percent today . Lionsgate CEO Jon Feltheimer and Michael Burns didn't react — just saying that the stock will fluctuate from day to day, and that "shareholders have spoken." We'll see what happens with the stock now that Icahn's proxy bid has been withdrawn and the directors have been elected.
The big question now — what happens to the proposed merger between Lionsgate and MGM — Icahn controls 14 percent of MGM shares. Icahn Enterprises had no comment on this, Lionsgate reiterated that they're interested.
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