Shares in the studio shot up more than 5 percent on news Icahn was offering a 15 percent premium to the stock's close on February 12. Analysts said any default could be avoided should creditors waive their rights.
Icahn said in a statement he planned to tender for an additional 10 percent or 13.2 million Lions Gate's shares, bringing his stake to 29.9 percent. That could constitute a change in control and trigger a technical default in the studio's bank credit facility.
Icahn already holds 18.9 percent of the studio, and would become its largest shareholder if the tender was fully successful.
Lions Gate responded by saying it will review Icahn's proposal and will make its recommendation to shareholders promptly. Morgan Stanley is serving as the company's financial advisor.
Lions Gate, home to the popular Saw movie series and Mad Men television series, has said in the past that if Icahn owned more than 20 percent of the company, it may constitute a change in control that could result in default and accelerated payment obligations on a Lions Gate credit facility that analysts peg at about $340 million.
Icahn said any such event of default could be avoided through a waiver by the lenders or through Lions Gate's prepayment or elimination of the senior revolving credit facility.
Shares of Lions Gate rose 4.6 percent to $5.47 on the New York Stock Exchange shortly before the close.
In a statement, Icahn said the offer was conditioned on Lions Gate not entering into any material transaction outside of the ordinary course of business. He said his offer will not be subject to financing.
(Editing by Richard Chang)