Lionsgate has lost the battle, but perhaps not the war, in its fierce fight to control Image Entertainment.
Image shareholders voted Tuesday to keep the indie DVD supplier’s incumbent slate of directors, dealing a blow to Lionsgate’s opposing candidates, sources said.
Execs from both companies declined to comment on the results, as they await the official tally from an independent tabulator. Final results should be disclosed in a week. Lionsgate, already a major Image shareholder, has been gunning to oust the current board to gain the upper hand in its quest to acquire Image. The two companies have been sparring publicly for months. Lionsgate has accused Image’s board and management of self-dealing and incompetence. Image has slammed Lionsgate as a bully with a major conflict of interest.
Image CEO Marty Greenwald, who is part of the incumbent slate, said he regrets the acrimony and noted that the two companies are still tied together.
“I think there were some parts of this war that have been over the top. It’s been disruptive to shareholders. But I think now that … we can get back to our agenda,” Greenwald said at the company’s annual meeting in Woodland Hills.
A special committee formed by Image last year continues to debate Lionsgate’s merits as a serious suitor, although Image basically has rejected the studio’s $4 a share buyout offer as too low.
Lionsgate vice chairman Michael Burns said he hopes Image strives to improve its operations, regardless of the result of Tuesday’s vote. And despite the nasty barbs traded in the proxy fight, he wants to continue working with Image execs.
“If they can recognize shareholder value,” Burns said, “then we are a very forgiving lot.”
Lionsgate did win over some outside shareholders.
Duke Bristow, the top candidate on Lionsgate’s alternate slate, is said to have earned 7.9 million votes. That trumps the 4 million votes Lionsgate represents as Image’s second-largest shareholder.
But Image scored the overall slate victory, as its lowest vote-getting candidate nabbed 10.3 million votes.
Image’s first order of business is mining recent high-profile DVD output deals with Relativity Media and Discovery Communications.
In 2007, Image hopes to release three to five theatrical DVDs from partner Relativity and 60 TV titles from Discovery network.