Magazine article Screen International

Lionsgate Makes New MGM Merger Proposal

Magazine article Screen International

Lionsgate Makes New MGM Merger Proposal

Article excerpt

Lionsgate has reportedly made a new proposal to merge with MGM. And in a surprise twist, Carl Icahn, the activist investor involved in a long-running struggle with Lionsgate management, is backing the move.

Though details have not yet been revealed, the proposal would give independent powerhouse Lionsgate a 45% stake in a merged company. MGM lenders would own the other 55%.

Icahn (pictured), who owns more than 33.5% of Lionsgate and holds more than $500m in MGM debt, said in a statement that a merger "would enhance value for all constituencies and we believe this proposal as submitted is far better for MGM holders than the current proposal to combine MGM with Spyglass."

The proposal comes a few days after MGM unveiled details of a bankruptcy plan which, if approved, would leave the long-beleaguered studio mostly owned by its lenders and headed by Spyglass Entertainment chiefs Gary Barber and Roger Birnbaum. …

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