NEW YORK (

TheStreet

) -- Activist investor

Carl Icahn

has pulled his bid for

Lions Gate Entertainment

(LGF)

after the New York State Supreme Court ruled that director Mark Rachesky can keep his increased voting power.

In July, the company diluted Icahn's stake in the company to 33.5% from 37.9% by issuing Rachesky 16.2 million new common shares, increasing his stake to 28.9%. In response, Icahn asked the court to rescind the extra shares controlled by Rachesky, or convert them into nonvoting stock.

The

Supreme Court of British Columbia also rejected his petition

to undo the deal in November.

Icahn has been offering bids to buy the studio

for between $6.50 and $7.50 per share for more than a year.

The 74-year-old billionaire was hoping to retract Rachesky's voting powers before the company's annual shareholder's meeting on Dec. 14. Icahn was likely planning to persuade shareholders to support his takeover plan.

"We will continue to monitor the situation at Lions Gate and will aggressively take all actions necessary to protect our investment," Icahn said in a statement. "We reserve all of our rights with respect to Lions Gate and its securities."

The judge has agreed to hold a full trial on the matter sometime in the next few months and will require Lions Gate to hold a shareholder meeting in September 2011.

-- Written by Theresa McCabe in Boston.

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