Pavan
09-15-2005, 02:23 PM
Lions Gate in a bid to spruce up Image
Acquisition would deepen company's film library
By SUSANNE AULT, BEN FRITZ
Lions Gate is on the hunt again.
Indie studio has purchased nearly 19% of Image Entertainment's stock with an eye toward a takeover of the Chatsworth, Calif.-based DVD producer and distributor.
In a regulatory filing, Lions Gate revealed it has purchased about 4 million shares of Image stock. Filing included a letter from Lions Gate topper Jon Feltheimer to Image's board in which he said a takeover of the independent DVD supplier would deepen his company's library of filmed entertainment and "add an important musical component to its business."
Lions Gate would also add Image as a label focused on specialty theatrical content if the deal goes through.
Stock-based offer is worth between $81.9 million and $90.6 million based on Wednesday's closing price.
Image has more than 2,800 exclusive DVD titles and 175 exclusive CD titles in domestic release and approximately 300 programs internationally.
In a statement, Image CEO Martin Greenwald said the bid was unsolicited, but his company's board would form a special committee to consider the proposal.
Perhaps looking to goose Lions Gate's bid, he added that "management believes that the value of the company today and in the future is far greater than what is being offered."
Lions Gate has been in an acquisitive mood this year since it paid down most short-term debt from its 2003 acquisition of Artisan.
This past spring it made an unsuccessful $1 billion bid for British kidvid company Hit Entertainment.
In its most recent financial results, Image posted a $1.7 million loss for the three-month period ended June 30. Execs blamed soft sales on a poor DVD market weakened by the absence of big movie titles.
In August, Image acquired Home Vision Entertainment and simultaneously struck an exclusive output deal for the successful esoteric Criterion Collection label.
Shares in Image rose 47% to $4.42 on the news. Lions Gate stock was down 2% to $10.15.
(Additional reporting by Jennifer Netherby. Ault and Netherby are reporters for Daily Variety sister publication DVD Exclusive.)
Acquisition would deepen company's film library
By SUSANNE AULT, BEN FRITZ
Lions Gate is on the hunt again.
Indie studio has purchased nearly 19% of Image Entertainment's stock with an eye toward a takeover of the Chatsworth, Calif.-based DVD producer and distributor.
In a regulatory filing, Lions Gate revealed it has purchased about 4 million shares of Image stock. Filing included a letter from Lions Gate topper Jon Feltheimer to Image's board in which he said a takeover of the independent DVD supplier would deepen his company's library of filmed entertainment and "add an important musical component to its business."
Lions Gate would also add Image as a label focused on specialty theatrical content if the deal goes through.
Stock-based offer is worth between $81.9 million and $90.6 million based on Wednesday's closing price.
Image has more than 2,800 exclusive DVD titles and 175 exclusive CD titles in domestic release and approximately 300 programs internationally.
In a statement, Image CEO Martin Greenwald said the bid was unsolicited, but his company's board would form a special committee to consider the proposal.
Perhaps looking to goose Lions Gate's bid, he added that "management believes that the value of the company today and in the future is far greater than what is being offered."
Lions Gate has been in an acquisitive mood this year since it paid down most short-term debt from its 2003 acquisition of Artisan.
This past spring it made an unsuccessful $1 billion bid for British kidvid company Hit Entertainment.
In its most recent financial results, Image posted a $1.7 million loss for the three-month period ended June 30. Execs blamed soft sales on a poor DVD market weakened by the absence of big movie titles.
In August, Image acquired Home Vision Entertainment and simultaneously struck an exclusive output deal for the successful esoteric Criterion Collection label.
Shares in Image rose 47% to $4.42 on the news. Lions Gate stock was down 2% to $10.15.
(Additional reporting by Jennifer Netherby. Ault and Netherby are reporters for Daily Variety sister publication DVD Exclusive.)