NEW YORK Lions Gate Entertainment Corp's board of directors has "failed" the movie studio and its CEO's leadership has done little to benefit shareholders, activist investor Carl Icahn charged on Wednesday.
In an open letter to Lions Gate's Chief Executive Jon Feltheimer, Icahn -- whose hostile bid to buy the company was rebuffed yesterday -- said the company's stagnant stock price is an indication that "something is wrong."
"You claim that I offer no 'meaningful vision,' thereby implying that you have one," Icahn said. "I cannot help but wonder why your 'vision' -- if so 'meaningful' -- never translated into shareholder value?"
Representatives of Lions Gate were not available to comment on Wednesday morning, one day after the board advised shareholders to reject Icahn's offer to purchase the portion of Lions Gate he does not already own for $6 per share.
The bickering comes as Icahn seeks to forestall a bid by the studio -- in which he already owns about a 19 percent stake -- to acquire storied rival Metro-Goldwyn-Mayer.
Icahn argued that the board would be misguided should it sanction an MGM deal or a bid for Walt Disney Co's Miramax film unit, for which Lions Gate would need to borrow billions of dollars.
What is more, the value of their library of film -- which includes MGM's James Bond franchise -- is "in a secular decline, never to return to cash flows seen during the heyday of DVD sales," he said in the letter.
Icahn said: "I suggest that your directors have failed shareholders."
Lions Gate rose 1.5 percent to $6.08 in morning trading on the New York Stock Exchange. The stock has risen about 9.5 percent in the past year, but has declined by about 45 percent over 5 years.
(Reporting by Franklin Paul, editing by Gerald E. McCormick)