WELCOME TO THE LIONS’ DIN

A furious Carl Icahn on Wednesday threatened new legal action against Lions Gate Entertainment after the studio converted $100 million in debt owed to Kornitzer Capital Management into 16.1 million shares, thereby valuing them at $6.20 per share. Kornitzer, in turn, sold them to Mark Rachesky, who had been Lions Gate’s leading shareholder with a 19-percent stake until Icahn made his move to gain control the company. Rachesky immediately saw his stake rise to about 29 percent, while Icahn’s was diluted to 33 percent from 37.9 percent. (Rachesky once served as a senior investment officer of the Icahn Holding Corporation.) In an interview with the Wall Street Journal, Icahn struck out at Lions Gate’s deal with his former lieutenant. Noting that the company had insisted that his offer in June of $7.00 a share to buy the company undervalued the company’s stock, Icahn told the newspaper, “It’s hard to understand how a company can advise its shareholders not to tender at $7 because the shares are worth more than $8, only to turn around later and insult them by issuing stock and selling it to one of their own board members at $6.20.” As the Journal pointed out Rachesky, who supports Lions Gate’s management, now controls the majority of the company’s shares that are not owned by Icahn.