Image Again Extends Merger Deadline

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Image Entertainment Inc. said Wednesday it has given Nyx Acquisitions Inc. until April 6 to finalize its $60.2 million purchase of the company, but demanded its suitor turn over $1 million from a trust fund to compensate for the repeated delays.

Nyx, a San Francisco affiliate of Q-Black LLC, has had repeated problems finalizing financing for the deal, which is valued at $100 million including assumption of debt. The company, which in November offered to acquire Image for $2.75 per share in cash, missed another deadline last week.

The Chatsworth home entertainment company, which has repeated problems finding the right merger partner in recent years, said it and Nyx have amended the merger agreement for a second time.

Nyx is increasing the business interruption fee to $2.5 million by depositing an additional $200,000 into the Image trust account. Nyx also agreed to Image’s demand to give Image $1 million from the account, which is nonrefundable and will have no effect on the final purchase price. Nyx will have two opportunities to extend the closing date beyond April 6 by adding more money to the trust fund.

“We continue to consider Image Entertainment to be a fantastic opportunity for our company to expand its operations in the entertainment industry,” said Chief Executive Joe Q. Bretz in a statement. “Although this challenging economic climate has prolonged our ability to finalize the transaction, we remain confident about bringing Image on board and look forward to closing the deal.”

Image shares were down 11 cents, or 8 percent, to $1.32 in morning trading on the Nasdaq.

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