Move follows deal struck with securities agency
BERLIN — Following its takeover of insolvent distrib Intertainment earlier this year, Kinowelt is bolstering the ailing company by bringing in licensing subsidiary Epsilon into the Intertainment fold.
Move is part of a deal struck with Germany’s securities supervisory agency BaFin to forego a mandatory takeover offer to Intertainment’s minority shareholders as Kinowelt seeks to restructure the company.
Kinowelt acquired 53.6% of the publicly listed Intertainment earlier this year and normally would have had to make an offer to fellow shareholders according to German law.
“The majority takeover of Intertainment is a further step in Kinowelt’s expansion strategy,” said Kinowelt founder Michael Koelmel. “By bringing in Epsilon, we are strengthening Intertainment’s core business, namely, co-financing of high-quality American films, and providing a significant contribution to Intertainment’s restructuring.”
A former subsidiary of the now defunct Kirch Group empire, Epsilon was bought by Kinowelt last year and continues to operate as an international distributor and co-financier. Company has agreements with the likes of Regency and Lakeshore and provided Kinowelt with hits such as “Mr. & Mrs. Smith” and Oscar winner “Million Dollar Baby.”
Intertainment went belly up this year after failing to recoup $122 million in damages from Elie Samaha and Franchise Pictures following a 2004 legal victory in U.S. federal court.
In August, Intertainment struck a $3 million settlement with Samaha and production shingle Sidonian Holdings (formerly Glickson Investments Intl.).
The U.S. court found Samaha and Franchise guilty of defrauding the once high-flying rights trader into paying wildly inflated budgets on a slate of films that included “Get Carter” and “The Whole Nine Yards.”