Village Roadshow takeover edges closer as buyer locks in bid lift
Private equity firm BGH Capital will pay part of a promised uplift in its takeover play for theme park and cinema operator Village Roadshow.
The $468.5m takeover bid is coming to a head and investors will vote on BGH’s two alternative but concurrent schemes of arrangement at a meeting this month.
The parties had agreed on a cash price of $2.32 per Village share under one structure and $2.22 per share under a second structure. But the shares added 6c to close at $2.35 on Monday as another major investor voiced its opposition to the bid pricing.
Spheria Asset Management, which has a 7.8% stake, flagged its opposition, saying it valued Village at more than $3 per share through the cycle.
The plan is already under fire from dissident shareholder Mittleman Investment Management, which sees fair value at closer to $5 per share. It has bumped up its stake to 11.24% and will vote against both schemes while encouraging all shareholders to follow suit.
Warner Bros. Movie World and Sea World theme parks on the Gold Coast have been open to the public for some time and this meant an uplift for having the theme parks open would be triggered on November 13.
But BGH and Village agreed to lock in the 12c uplift per share on Monday.
However, investors will miss out on two other potential price uplifts – one for the Queensland border being open and the other for cinemas returning to a full slate of movies.
Village said given Queensland border restrictions as at November 1, and the deferral of major film releases, the parties had agreed that those uplifts will not be payable.
Village’s independent board committee, led by Peter Tonagh, has unanimously recommended the BGH takeover and the independent expert concluded the deal was in the best interest of shareholders.
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.
Village shares had been trading about $4 each before the pandemic hit and decimated the tourism market.
This article originally appeared on www.theaustralian.com.au/property.
