Icahn raises bid for boutique film studio Lions Gate to $7.50 per share

Icahn raises bid for Lions Gate to $7.50 per share

NEW YORK — Activist investor Carl Icahn raised his bid for the boutique film studio Lions Gate Entertainment Corp. on Tuesday, driving up shares to a new high.

Icahn, who has been tussling with the studio’s management for more than a year, said he is now offering $7.50 per share, up from $6.50. The move comes after he lowered his bid by 50 cents to $6.50 in July but failed to win over more Lions Gate investors.

Lions Gate shares jumped 88 cents, or 14 percent, in morning trading to $7.37 after setting a new annual high of $7.40.

Icahn said his new offer will only be valid if the extra shares that the company recently issued to Lions Gate director Mark Rachesky are rescinded or converted into nonvoting stock.

Lions Gate, which has resisted Icahn’s takeover effort, did a debt-for-equity swap in July in a bid to dilute his stake in the company. It issued 16.2 million new common shares to Rachesky, boosting his stake to 28.9 percent, while diluting Icahn’s stake to 33.5 percent from 37.9 percent. Icahn has asked the Supreme Court of British Columbia to reverse the swap.

Lions Gate is based in Vancouver, Canada, though it operates out of Santa Monica, Calif. Its most recent releases include “The Expendables” and “The Last Exorcism.” And it was also behind the Oscar-nominated movie “Precious: Based on the Novel ‘Push’ By Sapphire.”

The company said in a statement that it will decide “promptly” whether to recommend that shareholders accept Icahn’s latest offer.