Image Entertainment bought by BTP Acquisition, Lionsgate spurned
03-30-07 | 06:17 PM
#1
Thread Starter
DVD Talk Limited Edition
Image Entertainment bought by BTP Acquisition, Lionsgate spurned
From WWW.HomeMediaMagazine.com:
Image Entertainment has entered into a definitive agreement with BTP Acquisition Co. LLC, an investor group led by film financier and producer David Bergstein, to sell Image for $95 million in cash, including assumption of a $9 million replication advance from Sonopress LLC, and the repayment of about $24 million of debt.
The total deal is valued at $132 million.
Under the terms of the deal, Image stockholders will receive $4.40 per share in cash.
Chatsworth, Calif.-based Image, which holds a 3,000 title catalog, last year rejected three separate $4 per share offers from its second largest shareholder Lionsgate, which holds 18.7% of the distributor's outstanding common stock.
A Lionsgate spokesperson declined comment on the deal.
About 38% of Image's common stockholders have agreed to vote in favor of the transaction, according to Image.
The distributor's board unanimously approved the merger and has recommended Image stockholders vote in favor of the deal.
Completion of the acquisition, which must also obtain regulatory approval, is expected to close by July 31.
Bergstein, who recently purchased U.K.-based Capitol Films, an international film distributor, and Thinkfilm, a North American film distributor, is expected to continue operations of the company, including retaining management.
"Image's executive management team has built a first-rate company, and we are pleased to be able to provide a strong cash price to the Image stockholders and maintain Image as the leading independent home entertainment distributor," said Bergstein.
Image COO David Borshell, who said he expects the company's management to meet with Bergstein next week to discus its structure going forward, said Image affords Bergstein distribution at big box retailers.
"[Bergstein] appreciates we've been together for 17 years and can help him create his vision for Image," said Borshell.
Recently hired chief marketing officer Jeff Fink, who has a one-year contract, is expected to stay with the company.
Analyst David Miller with Sanders Morris Harris in Los Angeles, said the transaction should play out nicely for Lionsgate and its 4 million Image shares.
He said the Santa Monica, Calif.-based mini-major could throw a wrench in the works by initiating a higher bid, not necessarily to acquire Image, but to "extract" more value out of Bergstein.
"We are not getting that body language out of [Lionsgate]," said Miller, in a research note. "Instead, we are being led to believe, at least at this point, that Lionsgate will vote its shares in favor of the deal."
Image Entertainment has entered into a definitive agreement with BTP Acquisition Co. LLC, an investor group led by film financier and producer David Bergstein, to sell Image for $95 million in cash, including assumption of a $9 million replication advance from Sonopress LLC, and the repayment of about $24 million of debt.
The total deal is valued at $132 million.
Under the terms of the deal, Image stockholders will receive $4.40 per share in cash.
Chatsworth, Calif.-based Image, which holds a 3,000 title catalog, last year rejected three separate $4 per share offers from its second largest shareholder Lionsgate, which holds 18.7% of the distributor's outstanding common stock.
A Lionsgate spokesperson declined comment on the deal.
About 38% of Image's common stockholders have agreed to vote in favor of the transaction, according to Image.
The distributor's board unanimously approved the merger and has recommended Image stockholders vote in favor of the deal.
Completion of the acquisition, which must also obtain regulatory approval, is expected to close by July 31.
Bergstein, who recently purchased U.K.-based Capitol Films, an international film distributor, and Thinkfilm, a North American film distributor, is expected to continue operations of the company, including retaining management.
"Image's executive management team has built a first-rate company, and we are pleased to be able to provide a strong cash price to the Image stockholders and maintain Image as the leading independent home entertainment distributor," said Bergstein.
Image COO David Borshell, who said he expects the company's management to meet with Bergstein next week to discus its structure going forward, said Image affords Bergstein distribution at big box retailers.
"[Bergstein] appreciates we've been together for 17 years and can help him create his vision for Image," said Borshell.
Recently hired chief marketing officer Jeff Fink, who has a one-year contract, is expected to stay with the company.
Analyst David Miller with Sanders Morris Harris in Los Angeles, said the transaction should play out nicely for Lionsgate and its 4 million Image shares.
He said the Santa Monica, Calif.-based mini-major could throw a wrench in the works by initiating a higher bid, not necessarily to acquire Image, but to "extract" more value out of Bergstein.
"We are not getting that body language out of [Lionsgate]," said Miller, in a research note. "Instead, we are being led to believe, at least at this point, that Lionsgate will vote its shares in favor of the deal."
04-03-07 | 11:13 AM
#3
Thread Starter
DVD Talk Limited Edition
Lionsgate Sells Image Stock
Author: ERIK GRUENWEDEL
[email protected]
Posted: April 2, 2007
Email this Story to Friend
Lionsgate has sold its entire stake of common stock in Image Entertainment for about $16.5 million, according to an April 2 filing with the Securities and Exchange Commission.
The Santa Monica, Calif.-based mini-major owned 18.7% of the Chatsworth, Calif.-based distributor, making it the second largest and most contentious individual shareholder.
Image last Friday announced it had accepted an acquisition offer of about $132 million from an investment company led by film financier and producer David Bergstein — owner of ThinkFilm and U.K.-based Capitol Films.
Lionsgate’s shares were sold at prices ranging from $4.16 to $4.26 per share. The studio sold an additional 123,500 shares of Image stock March 13 and 14 for about $390,000.
“Yes, we’re out of Image,” confirmed a Lionsgate spokesperson.
One analyst said Bergstein’s $4.40 per share offer exceeded most market estimates by at least 10 cents per share.
“[Greenwald] was a good sales guy,” said the analyst, who wished to remain anonymous.
The mini-major last year attempted unsuccessfully to acquire Image with three unsolicited offers. Then last fall, Lionsgate submitted a slate of board candidates to Image's annual shareholder meeting in an attempt to usurp control of the board, which included Image CEO Martin Greenwald.
The studio claimed the board was not doing enough to maximize shareholder value.
The contentious campaign included Lionsgate erecting a Web site outlining how it would improve Image, and Greenwald, in a blunt letter to shareholders, responding by declaring that Lionsgate’s rhetoric and actions had made Image unprofitable in fiscal 2006.
Despite two separate proxy firms withdrawing support for the incumbent board, Image shareholders narrowly rejected Lionsgate’s slate.
Following the acquisition announcement, analyst David Miller with Sander Morris Harris in Los Angeles said it was possible Lionsgate could have voted against the sale and used its leverage to extract a higher purchase price from Bergstein.
In end, apparently, Lionsgate just wanted to cash out.
“It creates a nice, below-the line gain for Lionsgate,” said Miller. “Cost (share purchase price) for Lionsgate we believe was in the high $2’s. A 62% return is outstanding by any benchmark.”
Author: ERIK GRUENWEDEL
[email protected]
Posted: April 2, 2007
Email this Story to Friend
Lionsgate has sold its entire stake of common stock in Image Entertainment for about $16.5 million, according to an April 2 filing with the Securities and Exchange Commission.
The Santa Monica, Calif.-based mini-major owned 18.7% of the Chatsworth, Calif.-based distributor, making it the second largest and most contentious individual shareholder.
Image last Friday announced it had accepted an acquisition offer of about $132 million from an investment company led by film financier and producer David Bergstein — owner of ThinkFilm and U.K.-based Capitol Films.
Lionsgate’s shares were sold at prices ranging from $4.16 to $4.26 per share. The studio sold an additional 123,500 shares of Image stock March 13 and 14 for about $390,000.
“Yes, we’re out of Image,” confirmed a Lionsgate spokesperson.
One analyst said Bergstein’s $4.40 per share offer exceeded most market estimates by at least 10 cents per share.
“[Greenwald] was a good sales guy,” said the analyst, who wished to remain anonymous.
The mini-major last year attempted unsuccessfully to acquire Image with three unsolicited offers. Then last fall, Lionsgate submitted a slate of board candidates to Image's annual shareholder meeting in an attempt to usurp control of the board, which included Image CEO Martin Greenwald.
The studio claimed the board was not doing enough to maximize shareholder value.
The contentious campaign included Lionsgate erecting a Web site outlining how it would improve Image, and Greenwald, in a blunt letter to shareholders, responding by declaring that Lionsgate’s rhetoric and actions had made Image unprofitable in fiscal 2006.
Despite two separate proxy firms withdrawing support for the incumbent board, Image shareholders narrowly rejected Lionsgate’s slate.
Following the acquisition announcement, analyst David Miller with Sander Morris Harris in Los Angeles said it was possible Lionsgate could have voted against the sale and used its leverage to extract a higher purchase price from Bergstein.
In end, apparently, Lionsgate just wanted to cash out.
“It creates a nice, below-the line gain for Lionsgate,” said Miller. “Cost (share purchase price) for Lionsgate we believe was in the high $2’s. A 62% return is outstanding by any benchmark.”
04-04-07 | 03:38 AM
#6
DVD Talk Reviewer & TOAT Winner
Image started out by putting out porno movies on laserdisc- some of the people who started the company were in the porn business too. And I totally respect them for that.
04-04-07 | 03:41 PM
#7
Thread Starter
DVD Talk Limited Edition
Image has put out a lot of cool stuff (and a lot of crap) over the years. I'm glad that they weren't absorbed in Lionsgate (who have an equally spotty record). The more competition, the better.
