Shares Surge as Image, Nyx Negotiations Continue24 Mar, 2009 By: Erik Gruenwedel
Patience appears to be a virtue for Image Entertainment, which March 24 saw its stock rise another 15% as investors await resolution to a protracted merger with Nyx Acquisitions. Shares of Chatsworth, Calif.-based Image jumped more than 12% on March 23.
Apparently ignoring previous demands for additional money paid into a business interruption fee account, Image said the two companies were near a deal, according to a statement.
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. It has reiterated intent to cure the breach of the amended merger agreement. Regardless, Image has the legal right to terminate negotiations and take the interruption fee due to the breach.
“People are little more optimistic,” said an analyst, who wished to remain anonymous citing the ongoing merger talks. “I think both sides want the deal to happen. But I’m not sure how Nyx is financing it.”
Image shares closed up 19 cents to $1.43 per share.