Lionsgate Possibly Seeking Image Board Seats21 Mar, 2006 By: Erik Gruenwedel
Lionsgate is not going away.
The Santa Monica, Calif.-based mini-major is considering submitting a slate of directors for Image Entertainment's 2006 annual shareholder meeting in September.
Lionsgate, which is Image's second-largest shareholder at 19%, last week in filings with the Securities and Exchange Commission stated the Chatsworth, Calif.-based distributor's board was not acting in the best interests of the company and its shareholders.
Last October, Lionsgate attempted to acquire Chatsworth, Calif.-based Image for $80 million to $90 million, which the distributor rejected as inadequate. At that time, Image executives enacted a so-called “poison pill” stockholders rights plan designed to thwart coercive or hostile takeover attempts by third parties.
Lionsgate March 14 filed a complaint in the Court of Chancery of the State of Delaware seeking “declaratory relief” to Image's bylaws to the effect that all board member seats must be made available for election at the shareholder meeting.
The recent Oscar-winning studio (Crash) also requested that all current Image board members stand for re-election, in addition to establishing a proper time period for shareholders to nominate candidates for director.
Image COO David Borshell said management was focused on running the business as usual and Lionsgate's action has no impact on ongoing operations.
“Our attorneys will respond to the lawsuit in due course, but it's our policy not to comment on pending litigation,” said Borshell.
A Lionsgate representative was not immediately available for comment.