pNEW YORK mdash; Activist shareholder Carl Icahn raised the stakes in his yearlong dispute with Lions Gate Entertainment Corp. on Friday, launching an all-out bid to take over the movie studio following disagreements over its spending./p
pThe hostile bid comes a week after Lions Gate rejected Icahn's offer to buy a larger stake and rewrote its bylaws to make such a takeover attempt more difficult in the future./p
pIcahn owns almost 19 percent of Lions Gate, and his tender offer of $6 a share last month would have raised his stake to nearly 30 percent. That bid represented a 15 percent premium over the stock's latest closing price at the time./p
pLions Gate management has argued that Icahn's bid undervalues the studio and that a larger stake would have given Icahn too much say in major decisions, at the detriment of other shareholders. The company also warned that a change in control could trigger a default in a $340 million credit line from JPMorgan Chase Co. because it would amount to a change in control./p
pNow, Icahn is bidding for a majority stake in the company and said he is willing to buy all outstanding shares./p
pIcahn left his offer at $6 per share on Friday, just a few pennies more than Thursday's closing price of $5.97. Lions Gate had about 117.8 million shares outstanding as of Feb. 1, according to a recent securities filing, meaning Icahn would be willing to spend about $570 million for the portion of the company he doesn't already own./p
pIcahn is conditioning his offer on winning at least 50.1 percent of the company's stock. And it would only be valid if shareholders or the courts strike down the so-called poison pill that the company's board has approved./p
pThat provision, which took effect last week, triggers whenever any hostile acquirer gets a stake in the company exceeding 20 percent. Under a shareholders rights plan adopted by the company's board, such investors would suddenly find the value of their shares diluted, while the value of shares held by others would not change./p
pShareholders are expected to approve the measure in May, but Icahn said Friday that he will challenge it in court./p
pLions Gate, which is based in Vancouver, Canada, but operates out of Santa Monica, Calif., was behind the Oscar-nominated movie "Precious: Based on the Novel 'Push' By Sapphire" and owns the TV Guide network./p
pThe tussle between Icahn and Lions Gate management has been going on for more than a year and comes as Lions Gate is looking into buying the Metro-Goldwyn-Mayer Inc. studio and The Walt Disney Co.'s Miramax Films division. MGM is set to receive binding offers Friday./p
pIcahn wants to restrain the studio's spending and said Friday that shareholders should have a chance to vote on whether such a purchase is wise. He argued against buying another studio ndash; and the library of older titles that come with it./p
p"I believe library values are currently declining due to, in part, weak DVD sales," he said./p
pMessages left with a Lions Gate spokesman were not immediately returned./p
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