Icahn's Lions Gate swoop a Hollywood thriller

Wed Oct 22, 2008 3:29am EDT
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By Carl DiOrio and Etan Vlessing

LOS ANGELES/TORONTO (Hollywood Reporter) - When Carl Icahn becomes one of your company's biggest shareholders, speculation over its future heats up pretty quickly.

Clarity over the maverick moneyman's motives can take longer.

"Where there's smoke, there's usually ... smoke," said a wag at Lions Gate Entertainment Corp on Tuesday, a day after news circulated that Icahn had acquired a 9.2% stake in the parent company of the Lionsgate film studio.

Company execs suggested Icahn's recent share buys simply mean the oft-combative investor recognizes an undervalued stock when he sees ones -- and may have opinions over how to raise its value.

"My sense is that with a bigger stake he's going to be interested in discussing with us smart moves that he considers to be of benefit for shareholders," Lions Gate vice chairman Michael Burns said.

Icahn may have "a couple of things on his radar" as potential acquisition targets, Burns added. He declined to say what those might be.

Meantime, Burns' market losses turned out to be Icahn's gain. The Lions Gate executive lost almost half of his common shares as a result of a forced liquidation by Merrill Lynch on October 10, unintentionally helping Icahn boost his 3.7% stake when the big chunk of stock came onto the market.

Regulatory filings show Merrill sold about 700,000 of Burns' shares for a total $4 million after a margin call was triggered by the company's share price dipping below $6. Burns had pledged the shares as collateral on a ranch that he owns near Big Sur.   Continued...

<p>Investor Carl Icahn speaks at the Wall Street Journal Deals &amp; Deal Makers conference, held at the New York Stock Exchange, June 27, 2007. REUTERS/Chip East</p>