82.1 F
San Fernando
Thursday, Mar 28, 2024

Image in Sequel of Merger Difficulties

Failure to receive a $1.3 million fee has led Image Entertainment Inc. to allege a breach of its merger agreement with Nyx Acquisitions Inc. This is the second time in a year that a merger has hit the rocks for the Chatsworth-based producer and distributor of home entertainment programming. Nyx, an affiliate of Q-Black LLC, agreed in November to buy all outstanding shares in Image in a deal worth $100 million. The San Francisco-based new media and global investment group would also deposit $500,000 to secure payment of a business interruption fee. An additional payment of $1.3 million for the interruption fee was due no later than Jan. 20 and after Nyx failed to make the payment was notified by Image that it was in breach of the merger agreement. The Image board of directors is evaluating all its options, including terminating the merger agreement and litigation. Attempts to reach Gordon Bava, an attorney representing Image, were not successful. In a prepared statement, however, a company spokesman said that Image was disappointed that Nyx had not complied with its obligation under the agreement. “If Nyx immediately delivers $1.3 million in immediately available funds and can reconfirm to our complete satisfaction that it has the ability to finance the transaction, then Nyx will no longer be considered in breach of the merger agreement,” the statement said. The situation with Nyx is a repeat of what Image went through a year ago when a planned merger with BTP Acquisition fell apart because BTP could not arrange the financing. In the BTP deal, controlling interest in Image would have gone to BTP but Image would have remained a publicly traded company.

Featured Articles

Related Articles