Lionsgate Suddenly Dilutes Icahn Holdings

Ceasefire Ends; Lionsgate Ponders Icahn’s $6.50 A Share Bid

So now Carl Icahn owns only 33.5% of the film and TV studio, and not the 37.9% he had as of yesterday. Nasty, nasty, nasty. Though it is interesting to see these two camps whack at each other as Icahn tries for a hostile takeover. Here’s how Lionsgate described what it did today:

SANTA MONICA, Calif., and VANCOUVER, British Columbia, July 20, 2010 – Lions Gate Entertainment Corp. (NYSE: LGF) (the “Company”) announced that today it had completed a deleveraging transaction in which approximately $100 million of its senior subordinated notes were converted into common shares at an effective conversion price of $6.20 per share. The conversion price represented a 2.8% premium to Monday’s closing price of the Company’s common stock.

The transaction is a key part of the Company’s previously announced plan to reduce its total debt, as well as its nearer term maturities.

The transaction was effected by the Company’s wholly owned subsidiary Lions Gate Entertainment Inc. (“LGEI”) pursuant to the exchange of $36,009,000 in aggregate principal amount of its 3.625% Convertible Senior Subordinated Notes due 2025 and $63,709,000 in aggregate principal amount of 2.9375% Convertible Senior Subordinated Notes due 2024 in a private transaction. The notes were exchanged for new notes which were identical to the old notes but had an extended maturity date and extended put rights by two years and were immediately convertible at an initial conversion rate of 161.2903 Common Shares of the Company per $1000 of notes. The notes were subsequently converted into 16,236,305 common shares.