It’s the kind of M&A battle that movies are made of … or is it the other way around? Lions Gate’s largest investor, Mark Rachesky, says he supports management in the film and television studio’s defense against Carl Icahn, who happens to be his former boss. Icahn, the king of shareholder agitation, has criticized the studio’s high expenses and its acquisition of the TV Guide cable channel. He has threatened to mount a proxy battle and may call a special shareholder meeting to elect board directors.

Rachesky’s MHR Fund Management controls a 19.999 percent stake in Lions Gate. Icahn controls 14.5 percent and is seeking to boost his influence by making a tender offer to buy $325 million worth of the company’s convertible notes.

If Icahn is successful in buying the debt and converting it all into equity, his stake would rise to around 29 percent. But that would be expensive because the conversion prices are far above Lions Gate’s share price.

MHR said it has had preliminary talks with Lions Gate about nominating a candidate to the studio’s board. Icahn’s side growled, rather than roared. “We expect our documents for the tender offer to become available to noteholders on Friday,” said Keith Schaitkin, an attorney for Icahn. He declined further comment. Rachesky was once Icahn’s investment chief.

Deals of the Day:

* Bahrain- and London-listed investment company Investcorp said they were leading a consortium to acquire a 70 percent stake in Saudi gold and jewellery maker L’azurde. Azmat Taufique, co-head of Investcorp’s private equity business in the Gulf Arab region, told Reuters the acquisition is based on an enterprise value of more than $300 million.

* Libya will acquire Canada’s Verenex Energy Inc, blocking China National Petroleum Corp’s bid, the head of Libya’s National Oil Company said on Thursday.

(PHOTO: A lion is seen passing in front of a zebra in Kenya’s national park Masai Mara in this March 2004 file photo.)