Lions Gate Looking for New Image

Image Entertainment Inc., a distributor of DVDs and entertainment programming (see Criterion United), is the subject of an unsolicited bid from Lions Gate Entertainment Inc. and has engaged a financial services firm to advice it on the tax-free share-swap merger estimated in the range of 0.38 to 0.42 shares of Lions Gate for each share of Image (see the 8K).

Image announced the bid on September 13th and in its press release response, Business Week notes:

Martin W. Greenwald, Image Entertainment's president and CEO, said in a statement that the company was not for sale and that its value is "far greater than what is being offered."

Lions Gate already has 18.98% of Image's outstanding common stock as part of its transaction path.

The letter spelled out Lions Gate's intentions:

"This acquisition would be consistent with our desire to broaden and deepen our library of filmed entertainment, as well as to add an important musical component, and, as we discussed, to introduce (Image Entertainment) as a new studio label focusing on specialty theatrical content," co-Chairman and Chief Executive Jon Feltheimer wrote in the letter.

See the LA Business Journal and the LA Times for more coverage.