Lionsgate Up on Icahn Takeover Talk
SANTA MONICA, Calif. (
) --
Lionsgate Entertainment
(LGF)
shares spiked today after the company confirmed it is still in talks with billionaire bidder
.
Shares rose 3.7% in mid-day trading to $7.64 and closed at $7.37. Analyst David Joyce with Miller Tabak said that management's continuing talks with Icahn was a "contributing factor" to today's upward movement.
On Monday the company announced that its annual shareholder's meeting will take place on Dec. 14, during which management plans to discuss Icahn's offer. Icahn will most likely try to persuade shareholders to support his takeover plan.
Icahn currently owns 33.5% of the studio and has been offering bids for between $6.50 and $7.50 per share to buy the studio for more than a year. His
latest tender offer
to purchase the rest of the shares at $7.50 apiece expires on Nov. 12.
Icahn has also been pushing for a merger between Lionsgate and Metro-Goldwyn-Mayer.
Last week he
agreed to support MGM's bankruptcy plan
. He currently owns about 18% of MGM's debt. He will be granted a seat on the new MGM board of directors once the plan is complete.
On Tuesday, Lionsgate reported that it swung to a second-quarter loss as an increase in revenue was offset by higher overall expenses.
For the quarter ended September 30, the company swung to a loss of $29.7 million, or 22 cents per diluted share, compared with earnings of $31.7 million, or 26 cents per diluted share, in the same period a year ago. Losses were larger than analyst estimates of a loss of 11 cents a share.
Revenue rose 24.7% to $456.3 million from $366.1 million during the quarter as its overall motion picture revenue increased 23% to $341 million.
The company's total expenses were up 35.5% to $435.8 million from $321.7 million. Higher costs were attributed to the increased theatrical marketing costs as the company distributed four theatrical releases in the quarter compared to two releases in the year prior.
For the first half of the year, the company swung to a loss of $93.7 million, or 75 cents a share, compared with earnings of $68.1 million, or 56 cents a share, in the same period a year ago.
Revenue rose 5% to $782.9 million from $745.3 million.
-- Written by Theresa McCabe in Boston.
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RELATED STORIES:
>>Icahn, MGM Agree on Bankruptcy Plan
>>Carl Icahn Loses Lionsgate Bid
>>MGM Resorts; We Are Not MGM Studios
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