Image shareholders overwhelmingly approve BTP acquisition

By Susanne Ault -- Video Business, 10/22/2007

OCT. 22 | CENTURY CITY, CALIF.—Image Entertainment shareholders quietly approved the indie supplier’s merger with BTP Acquisition Group on Monday, marking a stark contrast from last year’s nail biter meeting when Lionsgate hoped to wrest control of Image.

Shareholders overwhelmingly voted to make Image a subsidiary of BTP, which also counts among its entertainment holdings ThinkFilm and U.K.-based Capitol Films.

Of the 15,785,917 Image shares voted, representing about 73% of the company’s outstanding stock, 15,745,980 shares were voted in favor of BTP’s acquisition. There were 37,644 against, and 2,293 abstaining.

Upon the merger closing, which is anticipated within the next two weeks, Image shareholders will receive $4.68 per share for 94% of the company’s outstanding shares. Shareholders will keep their remaining stock in Image, as the indie will remain a publicly traded company.

Not counting Image’s board of directors, just a small handful of shareholders were present here for the final vote tally.

During Image’s annual shareholders meeting in Woodland Hills, Calif., in 2006, executives spoke to a crowded house of shareholders split in allegiance between Lionsgate and Image. As its second-largest shareholder, Lionsgate had been seeking for months to acquire Image for $4 a share, believing it could turnaround Image’s financial performance. Yet, Image shareholders ultimately voted to retain the company’s existing board of directors.

That brutal fight was apparently fresh in the mind of Image CEO Marty Greenwald as he announced the current voting results.

“This started in August 2005 when Lionsgate gave us that unsolicited offer, which the [Image] board unanimously rejected. And that was followed by a painfully protracted chain of events,” Greenwald said. “But after a costly process, David [Bergstein, owner of BTP] approached us, and he found synergies between the companies. And that led us to where we are today, and we are delighted by the outcome.”

With Lionsgate at the helm, the studio would have retained Image's content catalog and likely gutted the rest, explained Greenwald, as the two companies overlap in distribution responsibilities.

Under BTP, Image chief operating officer David Borshell, Image chief financial officer Jeff Framer and Greenwald have signed onto Image through October 2008.

Borshell and Framer will likely re-sign to multi-year contracts once the BTP merger closes. Greenwald hopes to stay on at Image past next year as well, but is leaving the final decision to Bergstein.

“David [Bergstein] will control the company, and I will support any decision he makes,” Greenwald said. “I told him that if he sees me as valuable in the process of helping grow the company then I’ll stay.”

Additionally, Bill Bromiley is expected to soon shift into a senior role at Image in charge of content acquisitions. He recently left as president of First Look Home Entertainment to work as chief acquisition officer at BTP’s Capitol.

Greenwald is putting his trust in the fact that BTP needs Image as a domestic distribution partner.

“Lionsgate didn’t need us as a distributor,” said Greenwald. “They needed us to pick our bones, or our library. A large amount of David’s content will go through Image.”

In one sign of synergy between BTP units, soon-to-be Image exec Bromiley said he oversaw acquisition of Charlize Theron-starring drama Battle of Seattle, which ThinkFilm will release theatrically during first-quarter 2008. Image will likely later distribute the title on DVD.

Acquired for $2 million at this year’s Toronto Film Festival, Battle in Seattle covers the riots that erupted over World Trade Organization meetings during the mid ’90s.

“We always knew in our hearts that this would happen the right way,” added Borshell, following the BTP merger approval. “Now it’s going to be nice to focus our efforts on getting back to business.”