In the latest twist in a battle for control, Lions Gate Entertainment Corp. on Monday recommended its shareholders reject Carl Icahn's offer to buy the rest of the company for $6.50 per share.
Shares had closed up 12 cents, or 1.8 percent, at $6.72 before the boutique movie studio's late Monday announcement.
Icahn's latest offer is 50 cents lower than a previous bid, but above the $5.90 to which shares had fallen last month after his first bid failed to attract enough interest.
The company's recommendation follows a decision last week by the British Columbia Securities Commission to reject an application by Icahn to temporarily nullify a move by Lions Gate to issue new shares to an Icahn rival and dilute his stake.
That move, which saw director Mark Rachesky's stake increase to 28.9 percent, cut Icahn's holdings to about 33 percent.
Icahn sued Lions Gate, its board, Kornitzer Capital Management Inc., Rachesky and his investment fund in state court in New York, calling the stock issuance for $6.20 per share "especially reprehensible" because the Lions Gate board had told shareholders its stock was worth more.
Lions Gate, which has distributed such movies as "Kick-Ass" and "Killers," is based in Vancouver, British Columbia, but operates out of Santa Monica, Calif.
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