Carl Icahn's appetite for Hollywood is growing beyond Lions Gate Entertainment.
The activist investor is once again quietly buying up debt in Metro-Goldwyn-Mayer, people familiar with the situation said. He also has amassed a substantial amount of debt in troubled home-video chain Blockbuster Inc.
Icahn had accumulated and then sold debt in MGM earlier this year. In the last few weeks he has acquired what one person close to the situation described as a single-digit percentage in the studio's nearly $4 billion worth of debt.
There's no indication that Icahn wants to play a role in MGM if the company goes ahead with current plans for the top executives of Spyglass Entertainment to take over after a pre-packaged bankruptcy.
Should the Spyglass deal not conclude, however, Icahn's stake could prove strategic if MGM and Lions Gate get serious again about a possible merger. Icahn owns about 33% of Lions Gate stock and has been engaged in a long-running battle to take over that studio and replace its top management.
People close to the matter said that top executives at Lions Gate have continued to hold discussions with MGM and hope they could garner Icahn's support for such a deal.
Icahn did not respond to a request for comment.
Icahn's investment firm has also bought up a sizable amount of Blockbuster's nearly $1 billion in debt, a person close to the matter confirmed. Bloomberg and the Wall Street Journal have reported that Icahn may control more than one-third of the home-video chain's debt, which would allow him to block any reorganization plan.
Top executives from Blockbuster told the major Hollywood studios last month they were preparing to file for a pre-packaged bankruptcy in September. Icahn's involvement could possibly affect those plans, although the clock is ticking. The struggling company must come up with some way to address a forbearance on interest payments on its debt that expires Sept. 30.
Icahn has a long history with Blockbuster. He led a proxy fight against previous Chief Executive John Antioco in 2005 through which he and two allies joined the company's board of directors. He resigned from the board in January of this year.
A Blockbuster spokeswoman did not respond to a request for comment.