Image, Nyx Negotiate $1M Merger Extension Payment

By : Erik Gruenwedel | Posted: 14 Apr 2009
egruenwedel@questex.com

The prolonged $100 million cash purchase of Image Entertainment by Nyx Acquisitions has become sidetracked by negotiations over a $1 million payment to Image in order to extend the closing date for a third time, to April 20.

Chatsworth, Calif.-based Image April 14 said Nyx, an affiliate of Q-Black in San Francisco, had failed to deliver $1 million from the business interruption fee account to by the end of the business day on April 10.

The $1 million payment is in addition to the current $2.5 million business interruption fee — $1 million of which Nyx released to Image March 24 in connection with the execution of the second amendment to the merger agreement.

The Image board said it would issue a statement on a resolution of the fee payment as soon as possible.

The acquisition, approved by Image shareholders in February, calls 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.

Despite the apparent absurdity of the state of the negotiations, one analyst following the deal said investors remain optimistic for a deal as underscored by Nyx’s previous payments of $2.5 million into the interruption fee account.

“It seems like [Nyx] has intentions to do it, I just don’t know if they can get the money together,” said the analyst, who wished not to be identified due to the ongoing negotiations.