Image Acquisition in Doubt30 Jan, 2009 By: Erik Gruenwedel
The purchase of Image Entertainment by private equity group Nyx Acquisitions appears in doubt after it failed to deliver the remainder of a $1.8 million business interruption fee by the Jan. 20 deadline.
Nyx last November entered into a $100 million cash merger agreement with Chatsworth, Calif.-based Image. Nyx is a subsidiary of Q Black Media based in San Francisco and headed by co-founder and CEO Joe Bretz.
Upon entering into the agreement, Nyx made an initial deposit of $500,000 into a trust account as a down payment of the business interruption fee. It was formally notified Jan. 29 by Image to be in non-compliance with the merger agreement.
“We are very disappointed that Nyx has not complied with its obligation under the merger agreement and what this reflects regarding Nyx’s ability to close the deal,” said an Image spokesperson.
Mindful of the extent the current economic turmoil may have securing lines of credit, Image said that if Nyx delivered the outstanding $1.3 million and proved it could finance the acquisition, it would no longer consider the equity group in breach of the merger agreement.
The turn of events is reminiscent of the failed $130 million merger attempt of Image by BTP Acquisition Co. in 2007 that resulted in litigation.
Q Black is no stranger to the film business, having partnered separately with actor Rob Schneider (Deuce Bigalow, The Hot Chick) and Deviant Films (This Girl’s Life, Dirty, The Last Word) to produce independent feature films, according to Image.
The company’s business portfolio also includes nightclub development, real estate and technology development units.
Representatives from Nyx and Q Black Media were not immediately available for comment.