Village Roadshow board holds line against Mittleman Investment Management

Village Roadshow’s board is standing firm against dissident shareholder Mittleman Investment Management.

Suicide Squad costumes at WB Studio Showcase at Movie World. Picture: Village Roadshow Theme Parks.

Village Roadshow’s board is holding the line against dissident shareholder Mittleman Investment Management, which is trying to scuttle a scheme of arrangement proposed by private equity firm BGH Capital.

The battle for the famed movie and theme park company has come to life this week, with Mittleman upping its stake to about 10.5 per cent and calling for the corporate regulator to intervene as it seeks to head off two structured takeover schemes proposed by BGH Capital.

The Melbourne-based private equity group has teamed with the founding Kirby family and former chief executive Graham Burke, who together control about 42 per cent of the register, to propose a privatisation.

It lobbed a low-ball bid for the company valuing it at up to $468.5m, which Mittleman has lashed as not showing Village’s true value.

The US group has tapped law firm Clifford Chance to argue its case to Village’s board members and the Australian Securities & Investments Commission. If these avenues fail then it may intervene in a Federal Court hearing on Friday.

Mittleman has argued that the two schemes are unfairly structured.

Village told the ASX it had received a letter from Mittleman saying it intended to vote its shares against both of the schemes of arrangement between Village and BGH Capital.

Village said it was “engaging with Mittleman in relation to its correspondence” but insisted it intended to proceed with both schemes, which have the unanimous recommendation of Village’s independent board committee, led by former media executive Peter Tonagh.

The board is set to release an independent expert’s report, with suggestions the document by Grant Samuel would have a favourable recommendation on the proposed deal.

Meanwhile, Mittleman has issued a call to other shareholders to vote against what it dubbed the “terrible schemes” so that BGH’s “opportunistic attempt” for Village would be rejected.

Mittleman’s letter said the coercive nature of the proposed dual structure takeover meant investors would choose either one structure and get a bad deal, or the controlling shareholders would back an alternative structure and force other Village shareholders to get an “even worse” deal.

However, senior sources told The Australian that although the first scheme was likely to be voted down the second one, in which the Kirby interest could be voted, would succeed.