Activist investor Carl Icahn agreed to dump his stake in Lions Gate Entertainment Corp. Tuesday, giving up on a lengthy battle for control of the film studio and producer of television hit "Mad Men."
Billionaire Icahn and his son, Brett, will sell up to 44 million shares of Lions Gate at $7 each, the Hollywood studio said in a statement. The price is about equal to Icahn's cost of acquiring the shares.
Lions Gate shares fell 4.9 percent to $7.15 in after-hours trading, from an earlier close of $7.52 on the New York Stock Exchange.
The billionaire investor, who waged a years-long public campaign against a studio he accused of mismanagement and over-spending, had tried to appoint his own people to the board and attempted a hostile takeover. Tuesday's announcement signaled a cessation of hostilities, including in court.
Icahn had at one point offered as much as $7.50 a share for Lions Gate after the company rejected an earlier $6.50 per share offer. Last December, shareholders defeated Icahn's attempt to install a dissident slate on the Lions Gate board.
The parties took their fight to court. Icahn sued Lions Gate and charged its directors had schemed to block his takeover bid, a case dismissed by the New York Supreme Court. In its own suit, Lions Gate alleged that Icahn interfered with earlier efforts to merge with Metro-Goldwyn-Mayer and other studios.
Icahn said on Tuesday he wished the company well with its future slate but added "my own 'slate' is pretty full at the time, and I therefore determined that it is a good time to exit."
He is now turning his attention elsewhere: bidding more than $10 billion for Clorox Co, which makes a range of products from bleach to Burt's Bees lotions.
Under the sale agreement, Lions Gate and MHR Fund Management, controlled by company director Mark Rachesky, bought 11 million shares each in a transaction due to close by Sept. 2.
Lions Gate has 35 business days to designate buyers for the Icahns' remaining 22 million shares.
The parties also ended all litigation against each other.
Lions Gate CEO Jon Feltheimer said the transaction is "accretive and antidilutive" and allows the company to focus on its long-term business plan.
In addition to "Mad Men," Lions Gate is the studio behind the films "Precious" and "Saw" and television shows "Nurse Jackie" and "Weeds."
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