There appears to be a delay (by design?) concerning the ‘gold proxy’ vote instruction form for Carl Icahn’s nominees for directorships at Lions Gate (LGF).
Lions Gate’s annual shareholder meeting is tomorrow, Tuesday, December 14. I received the company’s white and most recently its blue proxy cards via mail over the past week or two. However, Icahn’s gold proxy just arrived today, the day prior to the meeting. Note that I am located a mere 2 1/2 hour drive from where the proxy vote materials were purportedly sent. Receiving the materials a day in advance of the meeting is unreasonable and suggests it could be by design. Who is to know if someone was told to sit on the materials and delay their sending. For a packet that was supposed to be ready for delivery on the 6th of December to take a full week to arrive in a neighboring state naturally raises suspicion. We shall see if we can learn if there is a story behind this.
In the meantime, Lions Gate shareholders, please vote your gold proxy up until 11:59 PM EST tonight at which time voting ends. As Icahn does not believe he can gain control of the company (see below), and regardless of whether you are in support of Icahn, it is important to officially record your dissatisfaction with the existing entrenched management and board. In the case you have not received your gold proxy, please leave a comment to this post and/or contact me via my About page — and otherwise hopefully you have voted Lions Gate’s blue proxy (note that its older white proxy is no longer valid), withholding votes for the proposed slate of directors. Continue reading for some background on Icahn v. Lions Gate.
Icahn has been engaged in a year-long battle with Lions Gate’s management as he has become the company’s largest shareholder. However, a dilutive, ostensibly illegal insider debt-for-equity swap has made it nearly impossible for him to gain control of the company via his now expired tender offer at $7.50/share. I am highly disturbed by the dilutive insider debt-equity swap and the judge not issuing an injunction, but I’m also of the camp that sees $7.50 as insufficient. Of course Icahn wants to pay as little as possible to take control of the firm. And of course management wants to remain in place and do as it likes, which has resulted in destruction of shareholder value in recent years. I’d like to see both a higher bid and a management shake-up or in the very least, as Icahn is trying, some new faces on the board of directors. Lions Gate’s board hardly portrays any independence at all, with its executive insider presence, as well as some non-insiders having been directors as far back as 1997.
Disclosure: The author is long shares of Lions Gate. Position may change at any time; may also use LGF options for additional exposure or hedging.
