FOR IMMEDIATE RELEASE
ICAHN COMMENTS ON LIONS GATE ENTERTAINMENT CORP.
New York, New York, June 28, 2010
Contact: Susan Gordon (212) 702-4309
Carl C. Icahn today issued the following statement:
Some Lions Gate shareholders have asked: If Carl Icahn is so concerned about the near-term future of Lions Gate, what is
the reason he is offering to pay us $7 per share, especially when the stock was as low as $4.85 only a few months ago?
This is a legitimate question . It is true that I am very concerned about the future of Lions Gate and its present path. I have
been a shareholder for four and a half years and, during this period, the stock declined from a high of over $12 to $4.85
several months ago. I believe the reason it has now climbed back to $7 is due to two artificial stimuli:
Since February, when the stock was $4.85, in my opinion, nothing positive has happened to enhance “real” value. In fact,
the value of film libraries since then has declined precipitously in my opinion. Additionally, Lions Gate’s adjusted EBITDA
for 2010, recently announced by the company, was only $82 million. After interest, the cash flow before deducting cap ex
was only $24 million. It is interesting to note that this $24 million would be obliterated by only a 25% decline in film library
income (based on the current decline in DVD sales, this is certainly within the realm of possibility). In light of these facts
and the fact that there are no longer large purchases from index funds related to the Russell Index, I cannot help but
wonder who will purchase stock when my tender expires on Wednesday .
The question still remains: Why, in light of the above, am I paying such a large premium for Lions Gate’s shares? The
answer is as follows: I believe, in the long term, there is great potential for a distributor – not a producer – of independent
films. There is also great potential for the TV business. However, for Lions Gate to prosper, it must cut way back on SG&A
which is now running at