Dr. Mark Rachesky, former wunderkind of Icahn in the 90’s and now CEO of MHR (19.2% share in LGF) may not be the ally Icahn thought him to be. In the case of Lionsgate, Rachesky followed suit when Icahn doubled his stock giving the impression, at least to the press, that the two may be in cahoots to make a move on LGF. However, latest news may tell a different tale.

March 19

Is Carl C. Icahn’s former investment chief turning against him as the activist investor seeks to increase his influence over Lions Gate? With Mr. Icahn threatening to mount a proxy battle against the film studio, Lions Gate may be turning to its largest shareholder, MHR Fund Management, run by a former Icahn lieutenant, Mark Rachesky, for help, BusinessWeek says.

MHR, which holds just under 20 percent of the Hollywood studio, said in an S.E.C. filing that in “recent days” it had held “preliminary” talks with the studio about the possibility of adding an MHR nominee to its board. The announcement comes as Lions Gate prepares to its defense against a possible fight with Mr. Icahn. Reuters reported Wednesday that Lions Gate had hired an advisory team, including the investment bank Morgan Stanley and the law firm Wachtell, Lipton, Rosen & Katz, to help it fend off the moves by the activist investor.

And BusinessWeek reported Thursday that Lions Gate had been trying to build closer ties with MHR and Mr. Rachesky, as well. Furthermore, the magazine said, citing those with knowledge of the investors’ actions, Mr. Icahn and Mr. Rachesky have both talked with Lions Gate recently and have not always appeared to be in sync, or even close to one another.

I love when a good twist in the tale!

Icahn and the Lion
Icahn prepares a Lions share