Village owners agree to sale
MOVIE World owner Village Roadshow could be in new hands by November if shareholders approve a BGH Capital takeover offer valuing the company at $758 million.
After months of negotiations with BGH, Village yesterday announced it had agreed for the private equity firm to acquire a controlling interest in the theme park operator.
Shareholders are being offered up to $2.45 a share, which is partly contingent upon the reopening of Village’s theme parks and cinemas and Queensland’s borders being open to visitors from NSW and Victoria.
A shareholder vote expected by November.
The border with NSW and ACT will be closed from Saturday, which could present a problem for the deal.
New York-based activist investor Mittleman Investment Management, which has a significant stake in the company, is on record as opposing the deal, which it considers to undervalue the company.
The Village board unanimously recommended the proposal. If approved, it would result in directors, including Robert Kirby and John Kirby, retaining a stake in the new unlisted BGH company controlling Village.
Clark Kirby remains chief executive under the proposal.
Peter Tonagh, who heads the board’s independent committee, said the offer was in the interests of shareholders, being an opportunity to realise an attractive price for their shares in an uncertain environment. is
“The IBC (independent committee of the Village Roadshow board) has worked diligently, together with its advisers, to consider a range of alternatives since it first received a proposal from Pacific Equity Partners on December 19, 2019, and from BGH on January 24, 2020,” he said.
“Over that period of time there has been a significant change in Village Roadshow Limited’s financial position and trading environment.”
Mr Tonagh said the transaction came “in the absence of a superior proposal” and was subject to an independent expert concluding it was in shareholders’ best interests.
“In considering the merits of the BGH transaction, the independent directors have at all times been guided by our overarching responsibility to consider the long-term interests of VRL and all of its shareholders,” he said.
“It is our view that the BGH transaction will realise attractive value for all shareholders.”
BGH founding partner Ben Gray said Village’s assets were “irreplaceable” and BGH planned to invest heavily over “the next several years”.
“We are delighted to be investing in Village, which has over a 91-year period built an incredibly well-positioned business, delivering wonderful and unforgettable experiences to generations of Australians,” he said.
Mr Gray said BGH was excited to work with Mr Kirby, who “managed the business exceptionally well through COVID-19 and has worked tirelessly to re-open the company’s theme parks”.