Lionsgate Urges Replacement of Image Entertainment Board Members

SANTA MONICA, September 12: Lionsgate has sent a letter to
stockholders of the home entertainment outfit Image Entertainment, in which it
holds a 19 percent stake, urging them to replace six board members.

Lionsgate last year made a bid to acquire Image
Entertainment, which responded with the election of a special committee to
review the offer. The letter to shareholders today notes, “It took the
"independent" special committee of Image's board seven months to hire
Lazard to explore strategic alternatives and now, five months later, they still
have nothing to show for their efforts. We believe one reason for this
startlingly ineffective process is the web of relationships that many of the "independent"
directors have with Image (which presumably would be at risk if Image executed
a value-maximizing strategic transaction).”

Lionsgate has nominated six independent candidates for
Image’s board, to be voted on at the AGM on October 10.

The letter states, “We believe Image's poor financial
performance, sham "strategic alternatives process" and succession of
11th hour anti-takeover measures and transactions are unacceptable—and we
are taking action to protect stockholder interests… These nominees will ensure
that Image's Board is working to create value for all stockholders. We need
your support to replace Image's do-nothing Board.”