Carl Icahn surprised almost everybody when he completed his $7 per share tender offer deadline with control of 32% of Lionsgate, shares. Hollywood immediately feared the indie studio would be unable to continue business as usual, because Lionsgate’s $340 million credit facility with JP Morgan Chase Bank contained a covenant that allowed the lender could revoke the credit line once an outsider accrued more than 20% of shares in a takeover bid. Today, Lionsgate announced that it has amended its revolving credit facility with JP Morgan Chase. The trigger threshold for Change of Control has been upped from 20% to 50% control or ownership of the Company’s equity securities. This gives Lionsgate brass the ability to spending money while the Icahn Group takeover attempt plays out. The company notes that it keeps the same interest rate it had before, which is 2.5% above the standard bank borrowing rate (which is currently around 1.175%).
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