Independent studio Lionsgate has moved it defend itself from investor activist Carl Ichan by nominating major shareholder, Mark Rachesky, to the board.
The move comes days after Icahn, who has been critical of the current management, increases his stake in the company from 14.5% to 17.7%. Rachesky, who is Icahn’s former chief investment advisers, holds about 19.8% through his company MHR Fund Management, and is supportive of the management.
In a statement, he said he looked forward to “assisting management in its mission to continue building shareholder value”.
The studio’s annual shareholder meeting is due in September and it is thought that Rachesky’s appointment will help to fight off a possible proxy battle with Icahn. Lionsgate plans to announce the rest of its board imminently. The news boosted Lionsgate’s share price rose by 2% to $5.76.
The company has already stalled Icahn’s advances through a $66.6m refinancing deal with two of its largest bondholders, also aimed stalling Ichan. Under the terms of the deal, more than $90m of the company’s debt, which is about 28% of its debt, cannot to be sold to Icahn.
Meanwhile, last month it announced a disappointing $163m loss in revenue for the year to March 31, despite seeing rises across it theatrical, home entertainment, TV and library divisions. The losses were attributed to box office flops The Spirit (pictured) and Punisher: War Zone.