NEW YORK, Dec. 14, 2010 /PRNewswire/ -- Carl C. Icahn released the following statement today regarding the "election" of directors by Lions Gate Entertainment Corp. shareholders:
We are disappointed that shareholder democracy has failed – or rather was subverted – in the case of Lions Gate's annual meeting of shareholders as a result of the voting of over 16 million shares that were issued to director Mark Rachesky at a bargain price in a transaction approved by Lions Gate's board of directors "at a midnight meeting" in July in an effort to entrench themselves. It is clear to us from our analysis of the preliminary voting results that had this dilutive transaction been rescinded, as we had requested of courts in New York and Canada, our slate of nominees would have been elected.
This whole situation is a very sad commentary on the state of corporate governance today. The biggest losers are the shareholders of Lions Gate who were deprived, as a result of the machinations of Lions Gate's board and senior management, of the opportunity to receive a large premium for their shares in our tender offer. Unfortunately, shareholders might be in for even more pain. The shares have already lost more than 8% of their value since December 8, 2010, the day before the New York Supreme Court denied our motion for a preliminary injunction regarding the dilutive transaction. As ISS pointed out: "While recognizing that the company has no compelling peers, ISS notes that total shareholder returns over the past five years - down 27.9% - are nearly 22 percentage points worse than the average of other media conglomerates, and 24.6 percentage points worse than the S&P 500 index, even accounting for the clear uplift the Icahn tender offers have provided over the past 9 months. Though revenue growth has been respectable for the past three years, analyst consensus predicts it will grow more slowly over the next three, and the company will continue to struggle to convert it to profitability."
We are pleased that the New York Supreme Court will hold a full trial on the dilutive transaction within the next several months and will require Lions Gate to hold a meeting of shareholders again in September 2011 following the ruling in that case. We also intend to continue pursuing legal remedies in Canada. We will continue to monitor the situation at Lions Gate and will aggressively take all actions necessary to protect our investment, and we reserve all of our rights with respect to Lions Gate and its securities. We thank shareholders for their support and hope that they continue to stand with us in our quest to save Lions Gate.
SOURCE Carl Icahn