BTP changes Image deal, effectively lowering price
By Susanne Ault -- Video Business, 12/26/2007
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DEC. 26 | BTP Acquisition Company, whose purchase of Image Entertainment has been long delayed, says it might shift from prior merger terms and start buying Image shares on the open market.
At the time of Image shareholders approving the merger, BTP said it would acquire 94% of outstanding Image stock at a price per share of $4.68 in cash. That is substantially higher than Image’s present trading price of $3.60 per share, as of the end of trading on Wednesday.
By buying Image on the open market, BTP will be paying less than the $4 per share offered earlier by rebuffed suitor Lionsgate.
Originally, BTP was forbidden from purchasing outstanding Image stock on the open market, regardless of current pricing. But in a Dec. 21 SEC filing, BTP explains that it is allowed to alter the previous merger arrangement, since that restriction has since expired.
“That Purchase Restriction had a one-year term and expired in November 2007,” said the filing. “On account of the lapse of the Purchase Restriction, [BTP] and its affiliates are no longer contractually prohibited from acquiring securities from the issuer.”
After several delays, Image and BTP are expected to close the merger transaction by Jan. 14.
At deadline, Image was not responding for comment.