Lions Gate holders agree to swap $66.58 million 3.625% convertibles, skip Icahn's offer

By Angela McDaniels

Tacoma, Wash., April 20 - Lions Gate Entertainment Inc. said some holders of its 3.625% convertible senior subordinated secured notes due 2025 agreed to exchange $66.58 million of convertibles for an equal amount of new 3.625% convertible senior subordinated secured notes due 2025 to be issued under a new indenture.

The agreement was reached Monday, according to an 8-K filing with the Securities and Exchange Commission.

Some of the holders who agreed to exchange also agreed, subject to some exceptions, to not tender any of their 2.9375% convertible senior subordinated notes due 2024 into the tender offer being held by some affiliates of Carl Icahn.

As previously reported, Icahn's group is offering $750 for each $1,000 principal amount of the 2.9375% convertibles and $730 for each $1,000 principal amount of the 3.625% convertibles.

New convertibles terms

The new convertibles are guaranteed by parent company Lions Gate Entertainment Corp.

The initial conversion rate of the new convertibles is 121.2121 shares per $1,000 principal amount of notes, which is equivalent to a conversion price of about $8.25.

The conversion price of the old convertibles is $14.28. Lions Gate stock closed at $5.36 (NYSE: LGF) on Friday.

Holders of the new convertibles will be entitled to a make-whole premium under some circumstances upon a change of control.

The new convertibles are callable at par beginning March 15, 2015 and are putable at par on March 15 of 2015, 2018 and 2023.

The old convertibles become callable on March 15, 2012 and are putable on March 15 of 2012, 2015 and 2020.

Lions Gate Entertainment Inc. is a Santa Monica, Calif.-based subsidiary of Lions Gate Entertainment Corp., which is a filmed entertainment studio with headquarters in Vancouver, B.C.

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