Image Extends Nyx Merger Deadline, Collects $1 Million

By : Erik Gruenwedel | Posted: 25 Mar 2009
egruenwedel@questex.com

Merger amending is becoming a lucrative side business to Image Entertainment.

The Chatsworth, Calif.-based DVD distributor March 25 said it again agreed to extend the merger agreement with Nyx Acquisitions, originally slated to close Feb. 26.

The second amendment allows Nyx, a subsidiary of Q-Black LLC in San Francisco, until April 6 to close the deal in exchange for adding $200,000 to the current $2.3 million business interruption fee trust account.

Nyx also agreed to release $1 million from the trust account to Image, which does not have any effect on the acquisition purchase price.

Image shareholders last month formally approved the acquisition, which called for Nyx to pay $2.75 per share in cash ($60.2 million), in addition to assuming all outstanding debt, for a total purchase price of $100 million.

The newly amended agreement also allows Nyx to extend the merger deadline to April 20 provided it informs Image by April 2 and pays an additional $1.5 million into the business interruption fee account. The deadline can be extended even further until May 4 if Nyx deposits another $3 million into the account.

“We appreciate the patience and support of our shareholders through this extended process in a clearly difficult financial environment,” said Martin Greenwald, chairman of the board. “We believe that Nyx has a sincere desire to consummate the transaction, which we firmly believe is in the best interest of our shareholders.”

Joe Q. Bretz, CEO of Nyx, said he still considered Image to be a “fantastic opportunity” for the company to expand its operations in the entertainment industry.

“Although this challenging economic climate has prolonged our ability to finalize the transaction, we remain confident about bringing Image on-board and look forward to closing the deal,” Bretz said, in a statement.

After a two-day surge, investor patience for a deal may be waning as Image shares declined 10% in midday trading.

“I think both sides want the deal to happen,” said an analyst, who wished to remain anonymous citing the ongoing merger talks. “I’m still not sure how Nyx is financing it.”