Lions Gate mulls negotiations with Icahn

LOS ANGELES (Reuters) - Lions Gate Entertainment said on Monday it is exploring whether to negotiate with billionaire investor Carl Icahn, who has made a hostile $7 per share offer for the company.

The Hollywood studio behind "Saw" and "Mad Men" repeated its assertion that Icahn's bid is inadequate, but nonetheless opened the door to possible talks in a filing on Monday with securities regulators.

In the filing with the SEC, Lions Gate said its board believes "it would now be appropriate to respond to the Icahn Group's recent communications to determine whether there may be a basis on which to engage in negotiations and will do so today."

Icahn could not be reached for comment.

David Joyce, an analyst with Miller, Tabak + Co LLC, said that Lions Gate's management and board needs to have a constructive dialogue with Icahn to address their fiduciary duty to shareholders.

"It seems like they're kind of burying the hatchet in order to have perhaps productive discussions," Joyce said.

Icahn, who owns interests in a swathe of U.S. companies and is known for past moves to influence the direction of companies such as Time Warner, has been frustrated with Lions Gate's management and the stock's lackluster performance.

The billionaire investor has also said in the past that he would like to see his son, Brett Icahn, gain a seat on the Lions Gate board.

Lions Gate revealed in the SEC filing on Monday that it created a $16 million trust for any potential cash severance to senior executives, if their employment is terminated without cause in connection with a change in control of the company.

Last week, about 55 percent of Lions Gate shareholders voted to approve a shareholder rights plan, otherwise known as a poison pill, that theoretically would make it more difficult for Icahn to take over the company.

But the action was largely toothless, because Canadian regulators had already invalidated the poison pill in a decision upheld by a British Columbia appeals court.

(Reporting by Alex Dobuzinskis: Editing by Richard Chang)