Goldman Sachs has been at the side of Dreamworld owner Ardent Leisure before, but this time its role is understood to be assisting the company with plans for its US-based Main Event business.
Buyout funds based in the US that have expertise in running entertainment companies like Main Event are believed to be making inquiries about the operation, and the business has long been seen as a logical spin-off candidate.
It is understood Goldman’s involvement involves speaking with US-based parties, although sources close to Ardent have said no plans for a sale of the division are on the cards.
But the situation lends weight to the theory that whatever party secures Ardent’s local rival, Village Roadshow, will also make a move on Ardent Leisure’s Australian-based theme parks including Dreamworld on the Gold Coast.
Village Roadshow owns the nearby Sea World, Movie World and Wet n Wild theme parks and it is understood that Ardent has for some time been eager to embark on a merger with its rival.
The cost benefits in combining the operations are said to be substantial.
While a merger could be knocked back by the Australian Competition & Consumer Commission, some analysts believe the risks are minimal.
In the past, Village Roadshow was against the move, but that was when the company was under the control of former chief executive Graham Burke, who stepped down from the top job about a year ago.
Village Roadshow is now run by Clark Kirby, son of Robert Kirby, who ran the company’s major shareholder, Village Roadshow Corporation, with his brother John and was the former chairman.
The Kirby family, which founded the company, have held an interest of about 40 per cent in the group through their entity Village Roadshow Corporation.
As well as theme parks, Village Roadshow is one of the country’s largest cinema operators and, combined with joint-venture partner Event Hospitality and Entertainment, has nearly 600 screens across 58 sites in all states and is seen as undervalued.
In the US, Ardent’s Main Event business operates family entertainment centres, with 43 locations in 18 states.
Private equity is believed to have a keen interest in the sector, with Kohlberg Kravis Roberts recently lifting its stake in rival business Dave & Busters.
Going head to head in a battle to buy Village Roadshow are two private equity firms, BGH Capital and Pacific Equity Partners. PEP late last year offered $3.90 a share for Village Roadshow, then BGH offered $4 a share, and both companies are undertaking due diligence.
Many believe a call option over about 19 per cent of the Kirby family’s shares puts PEP in a stronger position.
Interestingly, the two funds are battling each other for at least three targets.
They are in the final stages to buy the $1bn-odd portfolio of Australian and New Zealand assets owned by glass bottle manufacture Owens-Illinois.
They are also competing for Laureate Education’s Australia and NZ business that is up for sale through Goldman Sachs in the late stages of the contest. Also in the contest is Baring Private Equity, with final bids due in the middle of next month.
Baltimore-based Laureate Education owns Torrens University and Think Education, along with the Media Design School in New Zealand.
PEP has invested in the education sector in the past, acquiring New Zealand-based Academic Colleges in 2015 for $NZ500m.
Last year, BGH purchased West Australian-based education provider Navitas in a deal worth more than $2bn.
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