Activist investor Carl Icahn took a last jab at the management of Lions Gate Entertainment Corp. (NYSE:LGF) with less than 48 hours until the expiry of his offer to acquire ownership of the film producer and distribution company.
Icahn said in a statement Monday that Lions Gate’s management is “deluding themselves, with their heads buried in the sand” in relation to what he claims is a significant sea change happening in the industry.
On Friday, Lions Gate reported approximately $323 million in revenue, generating $110 million in cash flow in fiscal 2010 from the distribution of films and TV programs to various retail and media channels. Library revenue was up $44 million from 2009, despite a difficult retail environment during the recession.
Icahn, however, claims “there seems to be near universal agreement in the industry that library values are melting away like ice cubes. As a result, it’s not hard to believe that this $110 million will be drastically reduced in the near future, due primarily to the precipitous decline in DVD sales throughout the industry.”
Icahn said if he is not successful in replacing Lions Gate’s board, he has “no intention of remaining an investor in Lions Gate with this management team because it has become clear to me after talking with management that we will never agree on the future of the company.”
Shareholders have until 8:00 p.m. EDT (5:00 p.m. PDT) on June 16, to tender their shares to the Icahn Group’s offer of $7 in cash per share.
Lions Gates’ share price range during the past week: between US$6.95 and US$7.05; 52-week high: US$7.37; 52-week low: US$4.81.