Image Entertainment Extends Merger Agreement

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Image Entertainment Inc. said late Friday that it agreed to give Nyx Acquisitions Inc. more time to finalize its merger agreement in exchange for Nyx agreeing to pay a higher business interruption fee and making other concessions.

Nyx, a San Francisco investment group was supposed to close its $100 million acquisition of the Chatsworth home entertainment distributor on Thursday, two days after Image’s shareholders gave their approval. The two companies worked throughout the day Friday to come to an amended agreement, though Image could have opted to end the deal.

The amended merger agreement extends the closing date to March 20. Nyx agreed to increase the business interruption fee by $500,000 to $2.3 million, which Nyx would pay if the deal falls apart. Nyx may also extend the closing date to March 26 if it agrees to increase the business interruption fee by an additional $500,000.

Nyx in November agreed to buy Image for $2.75 per share in cash, or about $60.2 million. The deal’s total value includes outstanding debt. The merger was on the rocks once before, when Nyx was late in making a required payment in January.

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