I am entering a position (for my simulated portfolio) in Image Entertainment, Inc. (DISK) today at $2.16/sh.  They have a deal to be bought out by Nyx Acquisitions, Inc. (of Q-Black LLC) for $2.75/sh cash.

DISK recently said they failed to make a payment of $1.3 M on time, but today it has been reported that the payment came in.  Signs are looking good this deal will happen.

“A spokesman for Image Entertainment stated: “In connection with the delivery of the additional $1.3 million, Nyx, Q-Black, LLC and its principals provided assurances to Image that Nyx is fully capable of and committed to closing the merger. As a result, Image fully expects that, subject to stockholder approval of the merger on February 24, 2009, the merger will close on February 26, 2009.””  - Business Wire

Arb gap: $2.75 - $2.16 = $0.59, or 27.3% ROI.  If the deal happens soon, the annualized return will be great.

Sources:

AP article with deal announcement

$1.3 M payment article (BusinessWire via EarthTimes)