Lions Gate to name Rachesky, largest shareholder, to board
LOS ANGELES (Reuters) - Lions Gate Entertainment Corp said on Thursday it would name Mark Rachesky, its largest shareholder and a supporter of management, to its slate of board nominees as it faces continued pressure from billionaire investor Carl Icahn.
Rachesky, who formerly worked with Icahn, is co-founder and president of MHR Fund Management LLC, which holds about 19.8 percent of Lions Gate's common stock. Lions Gate said it would announce the remainder of its board slate in the near future.
Shares of Lions Gate, home to the "Saw" horror film franchise, rose 2.48 percent, or 14 cents, to $5.79 on the New York Stock Exchange early Thursday afternoon.
Analysts have said naming Rachesky to the board was a good defensive measure against Icahn, who holds a 16.9 percent stake in Lions Gate. Icahn has criticized Lions Gate for overspending and may wage a proxy battle.
"I look forward to joining the Lions Gate board of directors and assisting management in its mission to continue building shareholder value," said Rachesky in a statement.
MHR Fund Management said in a statement it will support Lions Gate's slate of board of directors nominees at the upcoming annual shareholders meeting in September.
Icahn-controlled affiliates said last month they had discussions with Lions Gate Chief Executive Jon Feltheimer and Vice Chairman Michael Burns, and may seek to add nominees to the company's board by removing directors or expanding the size of the board.
Icahn also tried unsuccessfully this year to buy $325 million worth of convertible notes issued by the studio in the hope of converting them to equity to raise his stake to 29 percent. Icahn was not available for comment on Thursday.
Lions Gate has said a change in control of the company -- which could be triggered by Icahn's reaching a 20 percent stake to surpass that of Rachesky -- could cause a debt default and accelerated payment obligations on its credit facility.
Lions Gate sold a 49 percent stake in the TV Guide channel for about $123 million last month.
The independent TV and movie studio recently reported a fiscal fourth-quarter net loss of 25 cents per share, compared with a profit of 22 cents per share a year earlier.
Revenue fell almost 10 percent to $463.2 million for the quarter ended March 31, from $511.6 million a year earlier.
(Reporting by Susan Zeidler; Editing by Richard Chang)
