DealZone

Win-win for Carl Icahn

June 9, 2010

As Wednesdays go, this must be one of the best in a while for activist investor Carl Icahn. He’s getting two board posts at Genzyme, for which he is dropping his proxy battle, and he has charmed the Canadians into approving his tender offer for Lions Gate Entertainment, for which all he had to do was promise to keep the Canadian film division in Canadian hands if he takes control of the Los Angeles studio.

All this is a welcome turn of events for the high profile investor who has suffered through his share of misses in recent years, including his disappointing investments in Blockbuster and, most famously, Yahoo.

Icahn had nominated himself and three allies to Genzyme’s board after a manufacturing crisis lead to shortages of two of the company’s life-saving drugs. Genzyme has agreed to appoint two Icahn representatives — Dr. Steven Burakoff and Dr. Eric Ende — and in return Icahn will withdraw his slate and vote his shares in favor of the company’s nominees. “I think overall this is a positive,” said Michael Obuchowski, chief investment officer at First Empire Asset Management, which owns Genzyme’s shares and oversees nearly $4 billion in assets. “It avoids a continuing confrontation with Icahn and provides more oversight over the direction the company takes.”

On the movie front, Icahn said last week he would launch a proxy battle for control of the board of Lions Gate, after the studio posted a narrower-than-expected, but second consecutive quarterly loss. Icahn said he will put up his own slate of director nominees prior to the company’s annual meeting. Lions Gate has not yet announced a date for the meeting. It may want to stay away from Wednesday when it gets around to choosing one.

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