BGH Capital lobs new offer for Gold Coast theme park operator Village Roadshow

Gold Coast theme park operator Village Roadshow has revealed it has entered into exclusive due diligence talks with a private equity firm about a possible buyout.

PRIVATE equity firm BGH Capital has entered into exclusive due diligence with Gold Coast theme park operator Village Roadshow to buy the company.

BGH previously launched a takeover offer for the listed Village Roadshow in January this year, offering $4 cash per share and valuing the Movie World owner at $780 million.

A lot has changed since that offer with the shutdown of the company’s theme parks and cinemas leading to a slump in revenue and the share price, which hit a low of 77c before bouncing back to above $2.

Village said this morning it has entered into a transaction process deed where BGH will be given four weeks to undertake due diligence with a view to reaching a deal to acquire all the Village shares in a scheme of arrangement worth $2.40 per share.

Movie World is closed due to the COVID-19 shutdown.

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That is $1.60 less per share than the previous offer and reflects the change in the share price owing to the COVID-19 shutdown. The new offer values the company at $468.5 million.

The proposal is subject to a range of conditions including “no further material deterioration in the operating environment or outlook for VRL”.

Investors responded positively to the news sending Village stock up 15 per cent to $2.04 in intraday trading.

The BGH offer is actually two offers.

Gemma King 15 and Lochie Holman 14 (in front carriage) with Jack Cassidy 20 and Rebecca King 20 (in second behind them) enjoy the Superman Escape rollercoaster at Movie World on the Gold Coast prior to the shutdown. Pics Adam Head

The revised or first proposal involves a BGH company acquiring all the shares in Village Roadshow’s ultimate holding company held by John Kirby, Robert Kirby and Graham Burke.

The holding company would then acquire all the shares held directly by holding company shareholders in the listed entity Village Roadshow and also those not held by the entity through a scheme of arrangement.

Under this arrangement John Kirby, Robert Kirby and Mr Burke would receive a combination of cash and shares in the new unlisted BGH company controlling Village.

Other shareholders would have the option to receive all cash or shares in the new entity.

Under this proposal the $2.40 includes the $2.20 base price per share.

There is an additional 12 cents on offer if Movie World and Sea World have reopened to the public three days prior to the shareholder vote and 8 cents if 75 per cent of cinemas have reopened in the same time period.

The other offer, whereby BGH acquires all the shares in Village through a scheme of arrangement, would only be considered by shareholders if the first offer fails.

This offer also has a lower base price of $2.10 per share.

No date has been set yet for the shareholder vote.

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