Lions Gate Shares Get Cheaper For Icahn

Lions Gate(LGF Quote) just got a touch cheaper for Carl Icahn, the billionaire takeover artist, should he wish to buy more shares of the independent movie studio in a bid to gain control of it.

After the bell Monday, Lions Gate posted a wider-the-expected loss, and its stock suffered in Tuesday's regular session, slipping 12%, or 76 cents, to $5.50, on heavy volume.

Though his intentions have been unclear -- indeed, almost certainly intentionally so -- Icahn has been attempting to affect some kind of change at the Santa Monica production company since last year.

He has lifted his stake in the company to 14.5% of its outstanding shares, while his former right-hand man, Mark Rachesky, has increased his stake to a hair less than 20%. (If anyone goes over 20%, it could activate defaults on a Lions Gate credit line.) Rachesky, however, in his disclosure filings, has maintained that he's simply a passive investor.

At the very least, Icahn has wanted to gain seats on the company's board and has used several devices to achieve that aim. He has negotiated with management. He has broken off those negotiations. He has started a tender offer for Lions Gate's bonds in hopes of converting them into stock. He has failed to buy enough of them to make any kind of difference, after Lions Gate successfully persuaded two big bondholders to promises that they wouldn't sell out to Icahn.

As for his motivations and his endgame, speculation has been that Icahn wants to acquire Lions Gate's sizable film library -- 12,000 titles in all, some of them lucrative franchises like the horror Saw series and the Tyler Perry sequence of goofball comedies.