Lions Gate loses appeal to restore poison pill in British Columbia court

Lions Gate loses appeal on Icahn poison pill

LOS ANGELES — Niche movie studio Lions Gate Entertainment Corp. on Friday lost an appeal to restore a shareholder rights plan that would have prevented a takeover bid from billionaire investor Carl Icahn.

The British Columbia Court of Appeal dismissed the case. It has jurisdiction over Lions Gate, the distributor of superhero movie “Kick-Ass,” because it is based in Vancouver although it operates out of Santa Monica.

The decision will allow shareholders to sell their shares to Icahn, who has offered $7 apiece. Last week, Icahn extended his offer until May 10.

Lions Gate has called the offer too low and has urged shareholders not to sell.

The shares rose 12 cents, or 1.8 percent, to $6.68 in after-hours trading after closing down 16 cents at $6.56 in the regular session Friday.

A transcript of the court’s oral ruling was not immediately available. While it was unclear why the appeal failed, the British Columbia Securities Commission on Friday released a condensed version of its reasons for voiding the plan last week.

“Takeover bids should leave shareholders of a target company free to make their own decisions whether to accept or reject the bid,” the commission said in a release.

The commission has allowed other companies to use so-called “poison pill” plans to give them time to seek another potential buyer. But Lions Gate wasn’t seeking a competing bid for shareholders to consider, the commission said.

A Lions Gate spokesman confirmed Friday’s dismissal but did not immediately have a comment.

Icahn controls nearly 19 percent of Lion’s Gate’s shares. He said last week that 6.6 million shares, or about 5.6 percent of the outstanding shares, had been tendered so far.