Not Just IPOs On Hold: Reuters Says Icahn Shelves Lion's Gate Offering? ~ MAKE MONEY BLOG$

10/7/11

Not Just IPOs On Hold: Reuters Says Icahn Shelves Lion's Gate Offering?

6:35 AM

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The window for initial public offerings slammed shut in the third quarter, but it is not just new issues that are being delayed by the market’s turmoil and uncertainty over everything from the state of the U.S. economy to Europe’s sovereign debt picture.

Reuters reportedWednesday that an offering of 19.2 million shares in Lions Gate Entertainment by funds tied to billionaire Carl Icahn has been shelved for the moment, due to poor market conditions. After a failed bid for control of the film studio, Icahn agreed to unload his 44 million share stake. The company and a fund controlled by board member Mark Rachesky purchased 11 million shares apiece, and Rachesky was named co-chairman in mid-September.

The postponed Lions Gate deal is not the only Icahn deal impacted by the market’s summer turmoil. The billionaire activist investor dropped a takeover offer for household products maker Cloroxlate last month. Icahn had argued that a strategic bidder like Procter & Gamble or Kimberley-Clark would come forward with a richer offer than he made for the business, but accepted that other large shareholders were not keen on running a sales process amid deteriorating financial markets.

Wednesday’s report on Icahn’s Lion’s Gate disposition comes after a rough third quarter for offerings that stifled IPOs and led issuers of secondary offerings to accelerate deals in order to capitalize on small windows to raise capital, according to capital markets data and analytics provider Ipreo.

Real estate investment trusts raised the most proceeds in the July-September period, largely thanks to a $2.4 billion offering from Annaly Capital Management, while a notable billion-dollar offering of Mosaic shares came as the Cargill Trust continues to wind down its stake in the fertilizer maker.

The backlog of IPOs waiting for the window to open remains robust, albeit smaller than a year ago when General Motors had a $15 billion offering waiting in the wings. Avaya and social media players Zynga and Groupon are among the highest-profile names in registration. (See “Dunkin’, Zillow Shine But IPO Window Closes In Q3.”)

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