Image Merger Hits Another Snag

The on-again, off-again merger between Image Entertainment Inc. and Nyx Acquisitions appears to be off again after Nyx failed to meet a fee-payment deadline. For the second time in as many months, Chatsworth-based Image considers Nyx in breach of the merger agreement. Under that agreement Nyx would pay $2.75 per share for all outstanding shares of Image stock. Nyx is an affiliate of new media investment and global investment firm Q-Black LLC. In January, Image claimed that Nyx was in breach of the agreement after failing to pay $1.3 million of a $1.8 million business interruption fee. Nyx paid the money several weeks later. After Image shareholders approved the merger Feb. 24, Nyx was given additional time to work out financing and pledged an additional $500,000 for the interruption fee to be paid by March 2. Image did not receive the money and notified Nyx it had breached the agreement. Nyx assured Image it would cure the breach by the end of day on March 3. Shares in Image closed down at $1.18. Mark R. Madler