Friday, 29 October 2010

Hollywood Babble On & On #623: File This Story Under "W"

Welcome to the show folks....

Okay, here's the story.

Carl Icahn, a billionaire corporate raider and shareholder rights activist, has been trying to take over Lionsgate Pictures for so long, I can really remember when it started anymore.

The management of Lionsgate, and some key shareholders, don't want Icahn to take over, because that would mean the management would be shown the door.

However Lionsgate's management were coveting the troubled and debt-addled MGM Pictures for a takeover of their own.

Icahn spent the longest time saying "Nay Nay" on the takeover, saying it would cost Lionsgate too much for too little.

Then Icahn had an amazing change of heart.

Suddenly, Icahn stopped opposing the MGM-Lionsgate merger and declared that he was all in favor of it now and would do anything to help, which included repeatedly trying to buy up all the MGM debt he could get his hands on.

Lionsgate Management was all giddy about this change, and for a while it looked like everything was going to be sunshine and unicorns from now one.

Then things changed again.... right back to where they started.

Lionsgate filed suit against Icahn, claiming he was playing a "double game" with his machinations during the merger discussions.


Wow, let me put this in the file under "W" for "Well d'uh!"

Sheesh, I had posited my own theories of what Lionsgate would call a "double game" almost 20 days ago when the change of heart first broke. And they're only just seeing the potential for it this week?

I know I'm a genius of staggering proportions. ("ego" is just another word for "intelligence" isn't it?) but I shouldn't have been the only one that saw something like this coming.

When Icahn had his change of heart, I asked myself: "What does Carl Icahn really want?"

There were three possible answers to this question:

A. Own or control a motion picture company capable of producing and distributing feature films.

B. Make a quick profit from the various high finance machinations surrounding Lionsgate and MGM.

C. All of the above.

Then you have to ask yourself: "How does such a sudden change in attitude and actions get Icahn what he wants?"

Add water, stir, and figure it out for yourself.

I'm not saying that you can't trust anyone when you're doing this level of big business. I'm just saying that you should probably follow the old Cold War dictum of "Trust, but verify" before you make any major moves.

It's called strategy.

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