UPDATE 2-Icahn says Lions Gate $6 offer fair
* Icahn says Lions Gate bid fair, when asked would raise
* Says only reason stock trading above $6 is him (Adds details, background, byline)
By Sue Zeidler
LOS ANGELES, March 29 (Reuters) - Billionaire investor Carl Icahn said on Monday his $6-a-share offer for Lions Gate Entertainment (LGF.N) is fair and that the only reason that the company's stock is trading above $6 is because of him.
The financier, citing the declining values of film libraries and what he perceives as mismanagement by Lions Gate in its moviemaking endeavors, defended the offer when asked by Reuters if he would raise his bid.
"Based on the fact that these film libraries are in decline and that management has done poorly with their big budget movies and the rumors the "Killers' might be a $75 million flop, I firmly believe that the stock would be lower than the $4.85 it sold at when we started to buy it again in early February," he said.
"The company's board of directors believes that Icahn's bid is inadequate and no amount of rhetoric is going to distract shareholders from that point," said Lions Gate spokesman Peter Wilkes on Monday in response to Icahn's statements.
In a statement last week in which it said Icahn had been trying to distract shareholders from a "woefully inadequate" bid, Lions Gate defended its track record and its theatrical business in particular.
"We have achieved profitability on approximately 70 percent of our film releases over the past ten years -- one of the highest success rates in the industry," Lions Gate said.
It said its upcoming slate which includes the Ashton Kutcher/Katherine Heigl film "Killers" as well as the newest film from the popular Tyler Perry franchise, reflects its focus on large niches where it has proven success.
Last week, sources familiar with the matter told Reuters that Lions Gate had decided it will not increase its offer for Metro-Goldwyn-Mayer, essentially withdrawing from the auction after Icahn offered to buy Lions Gate in a move designed to hinder the studio's bid for MGM. [ID:N2556843].
Analysts said Lions Gate's withdrawal or defeat in the MGM bidding might have boosted the stock as a potential acquisition of MGM was seen as weighing on the stock.
Growing perceptions that there will be a higher bid for Lions Gate, whether or not its from Icahn, are also boosting the stock.
"Icahn has set the wheels of motion for this company to be an acquisition candidate. I see $6 as a floor and the market expects there will be other offers or that ultimately this company will be bought," said Richard Dorfman, managing director for Richard Alan Inc, a media investment firm with a stake in Lions Gate.
(Editing by Bernard Orr)
