LOS ANGELES, April 15 (Reuters) - Billionaire activist shareholder Carl Icahn on Thursday raised his hostile bid for the 81 percent of Hollywood studio Lions Gate Entertainment Corp he does not own to $7 a share from $6.
His latest offer, which represents an increase of 17 percent from his previous offer, values the equity portion of Lions Gate at about $825 million.
Analysts put the entire value of Lions Gate, including debt and equity, at about $1.3 billion.
Lions Gate in response to Icahn's bid said it will review Icahn's offer and make its recommendation to shareholders promptly.
Icahn, who has long criticized Lions Gate, said he intends to replace Lions Gate's board with his own slate of nominees. The offering period will expire on May 14.
Lions Gate shares rose more than 8 percent to $6.90 in after-hours trade after closing at $6.37 during the regular session on the New York Stock Exchange.
Separately, billionaire entrepreneur Mark Cuban disclosed in a U.S. Securities and Exchange Commission filing that he now holds a 5.4 percent stake in Lions Gate.
Analysts and investors said Icahn's new offer is likely to be taken more seriously, whereas the earlier $6 bid was shrugged off by many as too low.
'I think this is further proof that Icahn is serious in his quest to have Lions Gate acquired either by himself or by another entity,' said Richard Dorfman, managing director for Richard Alan Inc, a media investment firm with a stake in Lions Gate.
Regarding Cuban, Dorfman said he believed the billionaire might be looking to profit in the likelihood of a sale of the independent studio.
'Cuban appears to be positioning himself to make a quick and nice profit on what looks to be an ever more likely acquisition of Lions Gate,' he said.
Cuban was not immediately available for comment.
In a letter to Lions Gate shareholders, Icahn said he decided to raise his offer price not because he believed $6 was inadequate but because he felt it was necessary to make every effort to protect his current investment in Lions Gate.
'We do not feel comfortable that existing management is the right team to guide Lions Gate through this difficult period,' he said in the letter.
(Editing by Bernard Orr) Keywords: LIONSGATE ICAHN (susan.zeidler@thomsonreuters.com; +1 213 955 6748; Reuters Messaging: susan.zeidler.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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