Image Entertainment Inc. said late Tuesday that it has terminated the proposed takeover agreement it had with BTP Acquisition Co, saying BTP was unable or unwilling to secure financing for the transaction.

Chatsworth-based Image said in a statement that the two parties terminated merger discussions. According to the agreement, BTP must pay a $4.2 million business interruption fee.

The acquisition deal had been on the rocks almost since it was announced about a year ago. The original deal was for $95 million, or $4.40 per share, which represented a 27 percent premium on Image’s $3.46 closing price the day before the announcement.

Image, a licensee, producer and distributor of home entertainment programming, said at the end of January that BTP had refused to provide information regarding its financing status sending shares in Image down as much as 40 percent that day. That sharp decline showed investors were very skeptical of the deal.

Shares in Image plummeted 19.5 percent to $1.25 in early trading Wednesday on the Nasdaq. Shares in Image have dropped 65 percent so far this year.