Carl Icahn Supports Lions Gate's Bid to Buy MGM

Billionaire investor Carl Icahn threw his support behind Lions Gate Entertainment's proposal to acquire debt-laden Metro-Goldwyn-Mayer, according to a filing with the Securities and Exchange Commission Tuesday. Icahn is Lions Gate's largest shareholder and also holds a significant amount of MGM's debt, according to a Wall Street Journal report.

Lions Gate (LGF), which has long pined for MGM, proposed Monday to merge the companies and give ownership to Lions Gate shareholders and MGM credit holders, according Lions Gate' filing with the SEC. Lions Gate noted in its SEC filing that it had "detailed discussions" with Icahn about its proposal before submitting it to MGM and it believed it has the support of its other two largest shareholders.

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In his SEC filing, Icahn said, "We believe that this combination of Lions Gate and MGM would enhance value for all constituencies and we believe this proposal as submitted is far better for MGM holders than the current proposal to combine MGM with Spyglass."

Privately-held MGM, which currently is holds more than $4 billion in debt, is considering a pre-packaged bankruptcy plan that, in part, calls for Spyglass Entertainment to take a 5% stake in exchange for Spyglass' films and assets, according to The Wall Street Journal.