Iwerks Shareholders Reject Proposed Purchase of Showscan

Iwerks Entertainment Inc.’s shareholders rejected its proposed $27.4-million purchase of Showscan Entertainment Inc., saying it was too expensive.

Burbank-based Iwerks’ purchase of Culver City-based Showscan was opposed by Heartland Advisors, holder of 24.7% of Iwerks’ stock, and by Providence Capital, also a large holder.

Investors and analysts said that Iwerks, a maker of motion simulator rides, was offering too much for Showscan, which produces films for giant-screen theaters, and that the purchase might not benefit shareholders.

“I’m elated at the news . . . this deal has been rejected,” said analyst Kevin Skislock of L.H. Friend Weirness, who rates Iwerks’ shares a “buy.”

The announcement was made after the close of trading. Iwerks shares rose 50 cents to $3.25 on Nasdaq. Trading in Showscan was halted with the stock down 44 cents to 63 cents on Nasdaq.