Image, Nyx Merger on the Rocks, Again20 Mar, 2009 By: Erik Gruenwedel
The troubled merger between Image Entertainment and Nyx Acquisitions hit another bump when Image March 20 said Nyx failed to deliver an additional $500,000 to the business interruption fee account by March 19 — required under the amended merger agreement to secure an extension of the merger closing date to March 26.
Nyx, a subsidiary of Q-Black LLC in San Francisco, has already paid $2.3 million into the trust to buy time to secure funding for the cash merger.
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.
Chatsworth, Calif.-based Image said its board would meet and announce a course of action by the end of the day. Should Image decide not to continue the merger, it could collect the $2.3 million fee.
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 has suppressed Image shares and, some believe, was instrumental in the recent termination of president David Borshell.