Not since Seagrams acquired a controlling stake in MCA in 1994 has a Canadian company been on the verge of acquiring a Hollywood studio.

Lionsgate’s latest play for a debt-laden Metro-Goldwyn-Mayer Studios (MGM) came Monday after the Vancouver-based mini-studio proposed a “business combination” between the two companies.

It’s early days for the merger talks, with no guarantee of success.

But a combination of Lionsgate and MGM, if it comes to pass, would merge Hollywood’s biggest indie producer and distributor, based in Canada, with a marquee studio laden with debt and yet holding an extensive library Lionsgate wants to push down an expanding content pipeline.

Lionsgate, in an October 12 filing with the Securities and Exchange Commission, said it proposed to MGM a “potential business combination” that would see the studio jointly owned by Lionsgate shareholders and around 100 major MGM debt-holders.

Crucially, the proposed merger has a greenlight from Carl Icahn, Lionsgate’s biggest shareholder and a wild card in any MGM deal as he continues a long-running battle for control of the Vancouver-based mini-studio.

Icahn is also a major MGM debt-holder.

“We believe that this combination of Lionsgate and MGM would enhance value for all constituencies and we believe this proposal as submitted is far better for MGM holders than the current proposal to combine MGM with Spyglass,” Icahn said, referencing a rival bid for MGM from Los Angeles producer Spyglass Entertainment.

Lionsgate’s run at MGM also involves a careful dance between warring shareholders, including Icahn and Mark Rachesky, who holds a 29% stake in the Canadian mini-studio, most of whom have crucially given their backing to a merged Lionsgate-MGM entity.

“The company (Lionsgate) believes that Mr. Icahn, in addition to MHR Fund Management and Capital Research Global Investors, the company’s three largest shareholders, are all supportive of the transaction,” Lionsgate said.

MHR Fund Management is led by Rachesky, who joined up with Lionsgate in July to complete a $100 million debt-for-equity swap that is the subject Tuesday (October 12) of a lawsuit being heard by the British Columbia Supreme Court, and brought by Icahn.

“We intend to continue to pursue our lawsuits regarding Lions Gate’s recent dilutive transaction with Mark Rachesky,” Icahn said Tuesday at the same time that he backed a merger of Lionsgate and MGM.

“Whether or not we prevail in those lawsuits, we intend to continue to support a combination of Lions Gate and MGM,” he added.