By BRETT SPORICH Staff Reporter
Battered by the downward spiral in its stock price resulting from a failed merger attempt, the management at Image Entertainment is making moves to grow the business so it can be a stand-alone company.
Image wants to move from B-movies to the A-list. The company also has its sights on significant future revenue from online streaming of videos.
Founder and Chief Executive Martin Greenwald recently told investors that the Chatsworth-based company has hired a crack team of film acquisitions and marketing veterans and is boosting its video digital delivery business in an effort to prove that there is more value to Image than its movie library.
Image has seen its stock price plummet from a high of $4.50 last October when it was announced that BTP Acquisition Co. would pay $4.40 a share for the movie supplier. After delays that Image blamed on BTP's financing problems, Image's stock sunk to a low of about $1.25 a share last week, slightly higher than the company's $1 a share book value. Image wants $4.2 million in damages from BTP, while BTP is demanding $1.5 million over the failed deal.
BTP is controlled by film financier and producer David Bergstein, who owns ThinkFilm and U.K.-based Capitol Entertainment and has limited movie distribution agreements with Image. BTP has not addressed Image's allegation of failed financing.
Image has long been known for its 3,000 DVD-title library of catalog content, a term used for older films and television fare or direct-to-video products. Its catalog includes older films such as "The Last Emperor," TV series including Discovery Channel's "Dirty Jobs" and countless direct-to-video releases.
By shifting its focus from catalog content to acquiring new theatrical releases with name stars, Image hopes to boost revenue and its cachet among DVD retailers, cable video-on-demand and online distributors such as NetFlix, Cox Cable, CinemaNow and MovieLink.
"Moving forward, we are aggressively pursuing the acquisition and exclusive distribution of high-quality, cast-driven feature films," Greenwald told investors last week.
BTP was the second company that tried to merge with Image.
In 2006, Lions Gate Entertainment Group became Image's second largest shareholder with an 18.5 percent stake in the company. The Santa Monica-based film company tried to replace Image's board as part of a hostile takeover, but Image averted the attack by demanding more than $4 a share. That led to Lions Gate's defeat. Once Lions Gate caught wind of BTP's offer to purchase Image it dumped its entire 3.9 million share stake in the company.
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