Lionsgate’s Board of Directors Rejects Icahn’s Unsolicited Amended Tender Offer

Lionsgate (NYSE: LGF) today announced that its Board of Directors, in consultation with its financial and legal advisors, has determined, by unanimous vote of the directors present and upon the unanimous recommendation of the Special Committee of the Board, that the unsolicited amended tender offer from Carl Icahn and certain of his affiliated entities (the “Icahn Group”) to purchase up to all of the common shares of Lionsgate for U.S.$6.00 per share is financially inadequate and coercive and is not in the best interests of Lionsgate, its shareholders and other stakeholders. Accordingly, the Board recommends that Lionsgate’s shareholders reject the Icahn Group’s offer and not tender their shares into the Icahn Group’s offer.

The basis for the Board’s recommendation with respect to the Icahn Group’s unsolicited amended tender offer, which followed a thorough review of the terms and conditions of the offer by the Special Committee and the Board, is set forth in Lionsgate’s amended Schedule 14D-9 filed today with the Securities and Exchange Commission (the “SEC”) and notice of change to directors’ circular filed with Canadian securities regulators.

“We believe that nothing has changed — the offer remains financially inadequate and still does not reflect the full value of Lionsgate shares,” said Lionsgate Co-Chairman and Chief Executive Officer Jon Feltheimer. “The only substantive change is that the Icahn Group is now bidding for full control of the Company without offering a meaningful vision, without demonstrating a relevant track record of industry experience and without paying a control premium. We believe that this financially inadequate proposal stands in stark contrast to our patient, disciplined strategy of building a strong and diversified Company step by step over the past 10 years under a seasoned Board of Directors and an experienced management team. Our plan for continuing to grow our portfolio of businesses is reflected in our ongoing achievements and initiatives each week.”

Many of the reasons for the Lionsgate Board’s recommendation to reject the Icahn Group’s previous offer are unchanged by the current offer. The reasons for the Board’s recommendation to reject the Icahn Group’s offer are described in greater detail in the amended Schedule 14D-9 filing and notice of change to directors’ circular (which will be mailed to Lionsgate shareholders), but key points include:

The Icahn Group’s offer, which continues to offer only U.S.$6.00 per share, is still inadequate from a financial point of view and does not reflect the value of the Lionsgate shares that senior management, under the direction of the Board, has built over the past 11 years. The unchanged price per share of the offer is an attempt to control Lionsgate without paying an appropriate premium. The average price target of Wall Street analysts for Lionsgate shares as of March 22, 2010 is at a 46.3% premium to the U.S. $6.00 per share offer price.

The Icahn Group is now seeking total control over the Company, despite lacking industry experience. The Icahn Group has said that if it is successful, the Icahn Group intends to impose its choices on Lionsgate’s shareholders by, among other things, fundamentally changing Lionsgate’s strategy, replacing Lionsgate’s Board of Directors, and potentially replacing top management “with several individuals who more closely share our vision for the future of the company.” The Icahn Group admits that this will likely thrust Lionsgate into a “potentially volatile period of transition.” In addition, the Icahn Group has not articulated a clear strategy or vision for Lionsgate, other than the general statement that it would prefer to “pursue a strategy aimed more at the consolidation of film and television distributors, as opposed to the acquisition of library assets.”

The acquisition by the Icahn Group of a majority or all of Lionsgate’s outstanding shares would still constitute an event of default under Lionsgate’s credit facilities. As of March 19, 2010, $472.1 million in total principal amount of such notes were outstanding and Lionsgate had borrowings of approximately $35.6 million outstanding under the credit facilities.

The offer has become more highly conditional and creates substantial uncertainty for Lionsgate’s shareholders. There are numerous conditions to the offer, including the elimination of the shareholder rights plan that now provides shareholders with protections against coercive and unfair attempts to take over the Company, many of which provide the Icahn Group with broad discretion to determine whether the conditions have or have not been satisfied.

Despite changes to the offer structure, the offer remains structurally coercive. While the offer is no longer a partial bid for less than all of Lionsgate’s shares, the single deadline for tenders, ability for the Icahn Group to waive the minimum tender condition, and intent not to provide subsequent offering period forces shareholders to make decisions as to their shares without full information and encourages them to tender simply in order to avoid being left with shares in a company effectively controlled by the Icahn Group. The timing of the tender offer deadline also seeks to preempt shareholders’ right to choose to confirm the shareholder rights plan.

The Board authorized shareholders right plan continues to protect the interests of Lionsgate and its shareholders from coercive or unfair attempts to take over the Company without the consent of a majority of the non-bidding shareholders, and without affording all shareholders fair value for all of their shares. Despite the Icahn Group’s revised offer for up to all of Lionsgate’s shares, the shareholder rights plan still covers Lionsgate and its shareholders because, among other things, the offer is not subject to a non-waivable condition that more than 50% of the common shares not owned by the Icahn Group have been tendered and not withdrawn and does not guarantee Lionsgate’s shareholders a subsequent tender offer period if that condition is satisfied. A copy of the shareholder rights plan is available on the SEC’s website,, and at The Board has authorized the convening of a special meeting of shareholders on May 4, 2010 to confirm the implementation of the shareholder rights plan.

The amended Schedule 14D-9 filing is available on the SEC’s website, and the notice of change to directors’ circular is available at In addition, the amended Schedule 14D-9 filing, the notice of change to directors’ circular, this press release and other materials related to the Icahn Group’s unsolicited offer are available in the “Investor” section of Lionsgate’s website at Copies will also be available at no charge by writing to Lionsgate at 2700 Colorado Avenue, Suite 200, Santa Monica, California 90404.

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