Lions Gate Entertainmenthas launched a $90m bid to buy Image Entertainment, the North American producerand distributor of home entertainment programming whose operations include a UKsubsidiary.
The unsolicited bid sentImage Entertainment's shares soaring by as much as 57% this Wednesday afternoon on NewYork's Nasdaq exchange upon speculation that Lions Gate would increase itsoffer.
In response, Image CEOMartin Greenwald declared that his company was not for sale and that its valueis "far greater than what is being offered."
Nonetheless Image, whosemarket capitalization has hovered around $93.5m, appointed a special committeeto evaluate Lions Gate's proposal.
Vancouver-based LionsGate also noted it recently bought 4 million shares of Image, nearly 19 percentof the Californian company, which employs around 200 workers and reported aprofit of $5.1m in 2005, on revenues o $118.4m.
"This acquisitionwould be consistent with our desire to broaden and deepen our library of filmedentertainment, as well as to add an important musical component, and, as wediscussed, to introduce (Image Entertainment) as a new studio label focusing onspecialty theatrical content," explained Lions Gate chief Jon Feltheimer.
Image buys the rights tofilm and video titles and releases around 30 of them in the DVD format eachmonth to a retail client list that includes: Amazon, Barnes & Noble, BestBuy, Blockbuster, Borders, Circuit City, Hollywood Video, Movie Gallery,Musicland Group, Netflix, Target, Tower Records, Transworld Music, VirginMegastore and Wal-Mart.
To date, Image hasstockpiled around 3,000 DVD titles and 175 CD titles for North Americanrelease, and another 300 or so titles internationally that are acquired throughits London-based acquisition agent Image Entertainment UK.
Lions Gate, which hasitself been the subject of takeover speculation ever since MGM was folded intoSony at such a hefty premium, has been looking to bulk up. In May, itconsidered buying the UK's Hit Entertainment, but decided against pursuing thetakeover. It already has a film library of 8,000 titles.