Image Gets Final $200K, Nyx Merger On Again9 Mar, 2009 By: Erik Gruenwedel
It’s a good thing for Image Entertainment wire transfers aren’t going the way of Saturday mail delivery just yet.
The Chatsworth, Calif.-based DVD distributor March 7 said it received the final $200,000 of the $2.3 business interruption fee from NyX Acquisitions, indicating the planned $100 million merger agreement was back on and no longer in breach.
Nyx, a subsidiary of Q-Black LLC in San Francisco, agreed March 2 to add an additional $500,000 to the $1.8 million interruption fee to postpone the closing date to March 20.
When it failed to deliver the additional fees by that date, Image declared Nyx in breach of the merger agreement, a status that allowed the DVD distributor to collect the interruption fee.
With the additional funds, the business interruption fee remains in a neutral trust account.
Image shareholders formally approved the acquisition — originally slated to close Feb. 26 — which called for Nyx to pay Image shareholders $2.75 per share in cash ($60.2 million), in addition to outstanding debt, for a total purchase price of $100 million.
The on-again, off-again negotiations between the Image board and Nyx are reminiscent of last year’s failed $130 million merger with BTP Holdings, a reality that helped drive Image shares below $1 last week.
An Image spokesperson said the economic climate and the crisis in the financial markets delayed consummation of the merger. He said the board avoided terminating the agreement with Nyx because it still believed the merger was in the best interests of shareholders.
“Image’s board remains committed to this transaction, and we believe that we are progressing toward our shared goal,” said the spokesperson.
Image shares were up 19 cents to $1.38 per share in midday trading.