New look for Village Roadshow parks after $586m takeover
Village Roadshow is planning a rejuvenation of its theme parks and cinema network after being taken over by private equity firm BGH Capital in a $586m deal that will see it taken off the Australian Securities Exchange.
The takeover comes after years of infighting, and then peacemaking, among the founding Kirby family, which started receiving overtures from private equity suitors in the middle of last year before the pandemic struck.
Melbourne-based BGH, led by Ben Gray, knocked out rival bidder Pacific Equity Partners, but then slashed its own bid as the pandemic swept the globe. Investors revolted against its low-ball offer and forced it to sweeten it to get the deal done.
Third-generation Kirby, chief executive Clark Kirby, is now positioned to put his own stamp on the company with the backing of BGH, which intends to pour millions into the theme parks and perhaps chase associated development opportunities.
Village owns the Warner Bros Movie World and Sea World theme parks on the Gold Coast which are readying for a wave of domestic tourism while international borders are shut.
The suitor succeeded in getting both its takeover schemes over the line in crucial votes on Monday. It will pay investors $3 a share rather than $2.95 a share under an alternative, lower-price scheme. The $3 plan was backed by 83.7 per cent of investors who voted and the $2.95 scheme was backed by 84.9 per cent.
By voting up the first scheme, investors ensured they would receive $3 a share.
The day was a win for investors as the vote on the first scheme had been expected to be tight. But dissident US shareholder Mittleman Investment Management appeared to partially soften its stance on the bid after initially speaking out against it as undervalued.
The second scheme, on which the founding Kirby family and veteran former chief executive Graham Burke could vote their stake of just over 40 per cent, had been on track to be voted up and would have seen investors receive $2.95 a share.
The new owners — BGH and the Kirby family — are expected to rev up the parks ahead of the holiday season, as pandemic-related restrictions are dropped, and cinemas are also getting back into action.
The meetings on the schemes were peppered with questions from investors about whether it was the right time to sell and whether the Kirby family should have been able to vote.
Investors questioned why the board opted for the takeover rather than going for a capital raising. But lead independent director Peter Tonagh, the former News Corp and Foxtel chief, said the BGH offer was better than the “status quo” for the company and it would have had to raise more than $35m it had pledged to repay when taking out loans to get through the coronavirus crisis.
The board also was quizzed about its recommendation of a previously low-ball offer from the private equity suitor but Mr Tonagh also defended this offer as better than the company’s circumstances, partly as the cinema operations face a renewed assault from streaming services.
“The independent board committee has worked tirelessly to deliver the best outcome and propose it to shareholders and it’s pleasing to see shareholders recognise the value in the BGH bid and vote overwhelmingly in favour of it,” he said.
Melbourne-based BGH has emerged as one the savviest buyers in the crisis. It also made a play for Virgin Australia, which is now controlled by US private equity firm Bain Capital. Last Friday BGH declared its offer for the theme park and cinema operator final after last month sweetening it to up to $3 a share.
This article originally appeared on www.theaustralian.com.au/property
