Lions gate missive to image shareholders a tough love letter.The title of Image Entertainment's current DVD DVD: see digital versatile disc. DVD in full digital video disc or digital versatile disc Type of optical disc. The DVD represents the second generation of compact-disc (CD) technology. release "Angry Harvest" sums up the Chatsworth-based company's relationship with its second-largest shareholder, Lions Gate Entertainment
The latest round of squabbling started on Sept. 12 when Lions Gate sent a letter to Image stockholders. The 10-page missive urged the election of six independent board members "to replace Image's current directors, whom we believe are entrenched en·trench also in·trench v. en·trenched, en·trench·ing, en·trench·es v.tr. 1. To provide with a trench, especially for the purpose of fortifying or defending. 2. , conflicted, and not acting in your best interests." The letter pointed to the company's poor performance and noted Lions Gate's two offers in the last 13 months to buy Image for $4 per share. The highly volatile stock closed on Sept. 21 at $3.53. In response, Image sent a letter supporting the re-election of its seven current board members. "Lions Gate is a hostile corporate raider corporate raider See raider. , attempting to take control of your company without raising its inadequate bid," wrote Chairman Martin Greenwald. "It appears from Lions Gate's recent statements, filings and overall actions that its desire may be to keep Image's share price from increasing in the hopes that Lions Gate's inadequate $4 offer will be accepted." Finally, in a Sept. 19 filing with the Security & Exchange Commission, Lions Gate denied trying to suppress Image's stock price. Since Lions Gate owns 18.8 percent of Image's equity (4 million shares), it would be counterproductive for Lions Gate to try to lower the price. Instead, the filing claimed that Lions Gate's buyout offer had propped up the stock. Both Lions Gate and Image distribute niche films. Their proxy battle will end on Oct. 6 when Image shareholders vote to determine the board. "The outcome is still uncertain," wrote Michael Kelman, an analyst with Pennsylvania-based Susquehanna Financial Group, on Sept. 12. "With the uncertainty surrounding the upcoming shareholders' meeting shareholders' meeting n. a meeting, usually annual, of all shareholders of a corporation (although in large corporations only a small percentage attend) to elect the Board of Directors and hear reports on the company's business situation. and the headline risk headline risk The possibility a negative news story will spread to other media outlets and cause a significant change in the value of an investment. of Lions Gate's prolonged hostile takeover attempt, we would remain on the sidelines On the sidelines An investor who decides not to invest due to market uncertainty. on the sidelines Of or relating to investors who, having assessed the market, have decided to avoid committing their funds. until this situation has been resolved." Kelman maintains a neutral rating on the stock. "Angry Harvest" is a German film about a farmer during World War II who hides a Jewish woman from the Nazis. When he falls in love with her, a game of cat-and-mouse ensues with deadly consequences. As a corporation, it seems that Image's life indeed imitates its art. |
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