Image Shareholders Approve Acquisition24 Feb, 2009 By: Erik Gruenwedel
Image Entertainment shareholders Feb. 24 formally approved a $100 million cash acquisition by Nyx Acquisitions, an affiliate of Q-Black, LLC, based in San Francisco.
Under the terms of the merger agreement, Nyx agreed to acquire 100% of the outstanding common stock of Image Entertainment for $2.75 per share in cash.
The deal is slated to close Feb. 26, but representatives from Nyx have requested additional time to finalize the financing for the transaction. Image said it would extend closing up to two weeks if Nyx satisfies certain conditions, including Image's right to collect the $1.8 million business interruption fee should the transaction not be completed.
Earlier this month Image received the final $1.3 million installment of a $1.8 million business interruption fee, indicating the planned acquisition was a go.
The deal appeared in doubt last month when Nyx failed to deliver the $1.3 million payment by a Jan. 20 deadline.
Despite the vote of confidence from shareholders, Wall Street remained guarded.
Image’s stock was up more than 30% to $1.92 per share midday before trading was suddenly suspended indicating concern by investors.
“Usually a stock will not be halted just for the shareholder vote,” said an analyst who wished not to disclose his identity because he was not authorized to comment officially. “That was the first sign something was not going as planned.”
The analyst said concerns continue regarding delays to the previously announced Feb. 26 closing date and the nature of Nyx’s private equity funding.
“We don’t know who is backing Q-Black,” he said. “Their Web site is rather vague.”
Image's stock, which closed down 13 cents to $1.34 per share, rebounded 8 cents per share in after-hours trading.