TORONTO (CP) _ Image Entertainment (NASDAQ:DISK) shot back Wednesday at Lionsgate Entertainment Corp. (NYSE:LGF), accusing it of distributing "incomplete and misleading information" to lower share prices in an attempt to buy Image.
The response came after Lionsgate sent a letter to Image’s shareholders Tuesday, urging them to vote in new directors and replace Image’s "do-nothing board." Lionsgate, Image’s second-largest shareholder, has been pushing to buy Image, a California-based DVD distributor, since late last year.
On Wednesday, Image’s senior vice-president of business affairs, Dennis Hohn Cho, sent a letter to Lionsgate saying the behaviour of the movie distributor was "manipulative and self-serving, and not in the best interests of our other shareholders. " A copy was also filed with the U.S. Securities and Exchange Commission.
Lionsgate’s attacks targeted a distribution deal that Image made with Relativity Media in August, questioning whether it would benefit shareholders. The letter from Image said, "…stockholders other than Lions Gate have expressed support and excitement about the substantial potential benefits of the (Relativity) deal to the company and all of its stockholders."
Relativity’s "expected delivery of major studio-calibre titles to Image for DVD and digital distribution should help increase shareholder value," Image said.
"In its capacity as a direct competitor of Image, (Lionsgate) no doubt would like such titles delivered to it instead, which may be further driving your campaign of disinformation," the letter said.
Accusations by Lionsgate also attacked Image’s current managers and accused them of relying on "hope" that stronger box-office results would create a greater demand for its products.