Shareholder group lashes out at Village Roadshow deal

The US investment house said Village shareholders should reap the benefits of a recovery, rather than them being captured by the high-profile private equity group run by Ben Gray, Simon Harle and Robin Bishop.
The US investment house said Village shareholders should reap the benefits of a recovery, rather than them being captured by the high-profile private equity group run by Ben Gray, Simon Harle and Robin Bishop.

Dissident US shareholder Mittleman Brothers has lashed out at an imminent deal to sell famed cinema and theme-park company Village Roadshow to private equity group BGH Capital in a controversial $468.5 million takeover.

The investment house, which has a stake of about 8.5%, could scuttle the transaction, which has been reworked in the wake of the coronavirus crisis that hit Village‘s operations, almost halving the proposed price.

The US investment house said Village shareholders should reap the benefits of a recovery, rather than them being captured by the high-profile private equity group run by Ben Gray, Simon Harle and Robin Bishop.

The suitor has been active during the market turmoil, making an unsuccessful play for Virgin Australia and picking up the Healius medical centre portfolio for $500m. But Village could be tougher, as independent shareholders, who account for about 60% of the register, will vote on the deal under two separate schemes proposed by BGH.

Mittleman Brothers chief ­investment officer Christopher Mittleman said his position had not changed since he dubbed the bid blatantly opportunistic and unfairly discriminatory against minority shareholders two months ago.

“COVID-19 will eventually transition from the headlines to the history books. Presuming so, the businesses owned by Village should likely return to their pre-COVID, pre-Dreamworld,” he said. “Having suffered through the double downturns (Dreamworld, then COVID-19), I think minority investors have every right to participate in the rebound, fully, and not have our share of the upside forcibly divvied up between a private equity firm and the controlling shareholders.”

On Tuesday Village gave private equity company BGH another week of exclusivity to conduct due diligence for its takeover scheme, which has the backing of the founding Kirby family.

The transaction process deed with BGH had been amended, with a one-week extension to July 28, Village said, amid expectations a deal is close to being struck. Village shares jumped by 14 per cent to $2.23 on the news.

It was another extension for BGH with an initial four-week period extended by two weeks to June 30, and a further two-week available extension taken as the parties pursued the deal. The extensions have been put down partly to the delays still affecting takeovers as lawyers and accountants gradually return to work.

If the deal goes ahead the theme park and cinema operator is set to become one of the highest-profile corporate takeovers in the wake of the coronavirus crisis.

The proposal values Village at up to $2.40 a share — a relative bargain, as the company had been in play for $4 a share before the virus struck. BGH’s offer could also be sweetened from a base $2.20 per share, with another 20c per share paid if Warner Bros Movie World, Wet ‘n’ Wild, Sea World and most cinemas have reopened three business days ahead of the deal being voted upon.

Mr Mittleman said if a revised offer was made the firm would “consider it at that time” and noted the interest of Village shareholders in his stance.

This article originally appeared on www.theaustralian.com.au/property.