Image, Nyx Negotiations Continue23 Mar, 2009 By: Erik Gruenwedel
Patience appears to be a virtue for Image Entertainment, which saw its stock rise more than 12% March 23 as investors wait to see if a protracted merger with Nyx Acquisitions soldiers on.
Ignoring previous demands that additional money be paid into a business interruption fee account to continue negotiations, Image said Nyx had reiterated its intent to cure the breach of the amended merger agreement by delivering a previous outstanding balance of the interruption fee.
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.
Nyx, a subsidiary of Q-Black LLC in San Francisco, has already paid $2.3 million into the trust to buy time securing funds for the cash merger. Because of the breach, Image has the legal right to terminate negotiations and take the interruption fee.
The Chatsworth, Calif.-based DVD distributor reiterated there was no assurance the continued negotiations would produce closure — a reality investors apparently shrugged off.