and converting 100M in debt for equity of 16.2m shares. "Anticipated" 13.7% dilution brings stock down from $7 to $6.04, before Ichan's latest bid of $6.5.
Lionsgate Completes Deleveraging Transaction 3:42 pm ET 07/20/2010- PR Newswire SANTA MONICA, Calif. and VANCOUVER, British Columbia, July 20 /PRNewswire-FirstCall/ -- 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.
And every other shareholder in the process. How anyone puts up with this management team is beyond me?! I'm all for deleveraging and reducing debt burdens, but 2024 & 2025 debt at the expense of current shareholders??? How bout, make some money in the next few years and retire the debt with that.
I love it so! Icahn's game playing (a renewed, conditional offer at $6.50, below his previous offer) is the work of an egomanical, narcissistic, disturbed, unbalanced, ego-feeding organism--one who knows nothing of the entertainment business, one who has ridden down several companies. Go LGF!
Seems to me that Icahn's latest $6.50 offer might have been a brilliant way to sell off some of these newly-issued shares in the broader market if he was in on this. The shares, in turn, would cover company debt and therefore help to increase the value of both Icahn and Rachesky's holdings. I still can't help but think that this might have been the plan they came up with in that truce period, which may have just been an excuse for a meeting.
What can I say, I watched too much X-Files as a kid and now I've got a thing for conspiracy theory :)
By all means, feel free to jump in and point out flaws in my logic, as I am admittedly talking out my a$$ at this point.