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BTP Looks to Acquire 'Cheaper' Image Entertainment

28 Dec, 2007 By: Erik Gruenwedel

Image Entertainment Inc.'s protracted acquisition by BTP Acquisition Co. LLC appears to have achieved an unintended or intended consequence, depending on which side of the equation you're on.

In a Dec. 21 regulatory filing, BTP said it might undertake acquiring shares of Chatsworth, Calif.-based Image on the open market rather than paying the current pending merger cash share price of $4.68.

Image shares closed Dec. 26 at $3.60 per share.

In the filing, BTP said a one-year confidentiality agreement with Image that expressly prohibited it from directly or indirectly acquiring Image stock had expired in November.In March, film financier and producer David Bergstein spearheaded the $130 million BTP bid that included $95 million in cash, assumption of a $9 million replication advance from Sonopress LLC and the repayment of about $24 million of Image debt.

Bergstein, who recently purchased U.K.-based Capitol Films, an international film distributor, and ThinkFilm, a North American film distributor, has stated he will maintain current operations of the company, including retaining management.

Closure of the acquisition has been delayed four times, most recently until Jan. 14.

It remains to be seen whether the Image board considers the BTP move a hostile takeover, which could trigger a variety of defense mechanisms, including the so-called “poison pill.” Such a strategy is aimed at making the stock of the company targeted for hostile takeover less attractive to the acquirer.

A representative from Image was not immediately available for comment.

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