New York investors slam BGH bid for Gold Coast theme park owner Village Roadshow

An investor in Movie World owner Village Roadshow calls the BGH offer “highly conditional, unusually complex, and blatantly opportunistic”.

ACTIVIST investors from New York have sharply criticised Village Roadshow’s decision to enter exclusive talks with BGH Capital for a buyout at $2.40 per share.

New York-based Mittleman Brothers filed a substantial holder notice with Village today after acquiring a combined 5.02 per cent stake in the Movie World owner.

It follows BGH’s revised proposal to acquire Village earlier this week at between $2.20 and $2.40 per share instead of the $4 per share offer from January.

A letter signed by chief investment officer Christopher Mittleman calls the new offer “highly conditional, unusually complex, and blatantly opportunistic”.

An empty Movie World on the Gold Coast with people staying away because of the coronavirus outbreak. SUPPLIED

“We are greatly concerned that the Board of Directors of Village Roadshow Limited have determined to engage with BGH Capital Pty Ltd in respect of their non-binding proposal for the Company, which if successful, would seek to deprive minority shareholders of their equity interests at a price range of $2.20 to $2.40 per share, a 45% to 40% discount to the $4.00 per share indicative proposal made by BGH on January 23, 2020, less than four months ago,” the letter reads.

“In our view, the offer is highly conditional, unusually complex, and blatantly opportunistic.

“It is also unfairly discriminatory against minority shareholders. As such, we are surprised that the “careful consideration” the Board states that it has given this proposal has resulted in something other than a polite “no thank you.”

“Instead, this Board has signed a Transaction Process Deed granting BGH four weeks of exclusive talks.

Clark Kirby, CEO of Village Roadshow at Movie World on the Gold Coast.

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“We therefore remind independent directors of the Board of their fiduciary duties to act in the interests of all shareholders, and of the consequences of dereliction of that duty.”

The letter ends by stating that any effort to acquire the shares of minority shareholders by BGH would be a “shameful act”.

Village CEO Clark Kirby has previously been quoted calling the proposal a “partnership” between BGH Capital and Village’s directors and major shareholders, rather than a direct sale.

That is because Village’s directors and shareholders would likely retain a significant stake in a new BGH-controlled company.

The new offer from BGH values the company at $468.5 million, far less than its January proposal of $780 million.