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Icahn and Lions Gate end hostilities

by Chris Nolter  |  Published August 31, 2011 at 2:58 PM
As Carl Icahn's quarrel with Clorox Co. escalates, the arch-activist investor and his son have settled a fight with Lions Gate Entertainment Corp., the film production house said Tuesday.

Carl and his son Brett will sell just more than 44 million shares for $7 each, valuing the stake at about $310 million. Icahn and Lions Gate also agreed to drop litigation.

Lions Gate closed at $7.52 on Tuesday, but in after-hours trading fell to just more than $7.

Lions Gate, of Santa Monica, Calif., generated $1.6 billion in revenue in fiscal year 2011. The company's titles include the Tyler Perry films, the TV series "Mad Men" and Charlie Sheen's return to television with the series "Anger Management."

A Lions Gate company has already purchased about 11 million shares.

MHR Fund Management LLC, which Lions Gate director Mark Rachesky controls, has purchased another 11 million.

Icahn will sell the remaining position, close to 22.1 million shares, in the next 35 days.

The takeout price roughly matches Icahn's cost basis for the shares, Lions Gate said.

Icahn tried unsuccessfully to upend Lions Gate's slate of directors last year.

The investor also sued the film company over a 2010 debt exchange that diluted his position. And Lions Gate filed suit against Icahn alleging tortuous interference.

Though Icahn's suits had been dismissed, he filed an appeal in April 2011. Meanwhile, Lions Gates' action in the U.S. District Court for the Southern District in of New York was partially dismissed this year.

Icahn noted in Tuesday's news release that his own "slate is pretty full at the time," making it a "good time to exit."

It is also a convenient time for Lions Gate to settle its dispute with Icahn. The company's next shareholder meeting is slated for Sept. 13.

Parella Weinberg Partners advised the Lions Gate board, which received counsel from Wachtell, Lipton, Rosen & Katz and Heenan Blaikie LLP.
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Tags: Carl Icahn | entertainment | lion's gate | movies

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