BGH Capital bid for Village Roadshow set for approval

BGH Capital’s takeover proposal looks likely to be approved by Village Roadshow at a meeting on Monday.

Village Roadshow chief executive Clark Kirby. Picture: Glenn Hampson

Famed entertainment company Village Roadshow at last appears to be headed off the Australian Securities Exchange with a takeover proposal by private equity firm BGH Capital appearing likely to be voted up at a meeting on Monday.

The Australian company, which owns Gold Coast theme parks and a cinema network, has been chased by BGH for more than a year — and BGH’s latest sweetened bids appear to have won enough investor support for the company to be privatised.

BGH offered two bids, one at $3 a share and another at $2.95, with the founding Kirby family and former chief executive Graham Burke able to vote on the second proposal. They hold just over 40 per cent of the register and The Australian has learnt this scheme is likely to get up, although it is well shy of a pre-pandemic bid of $4 a share.

The first proposal, at the slightly higher price, is in the balance, but once proxies are shown at a meeting on Monday morning, it could swing hesitant investors as it would mean the takeover deal could be done at the higher price.

While the company and bidder did not comment on Sunday, the deal’s pricing and structure has been criticised by dissident US-based Mittleman Investment Management, which has built a stake of just over 15 per cent.

The lure of taking the company private in a deal worth up to $586m has kept BGH at the table for months, and on Friday the Melbourne-based firm declared its offer for the theme park and cinema operator final.

Mittleman chief investment officer Chris Mittleman said the statement was qualified as it was subject to a superior proposal being made and BGH held matching rights.

Village shares closed at $2.91 on Friday as investors questioned whether the deal would succeed, despite it being backed by its independent directors, major proxy advisers and it sitting above independent expert Grant Samuel’s valuation of $2.03-$2.80 a share.

BGH’s sweetened bid won the support of local funds house Spheria Asset Management, which has a 7.8 per cent interest, and its prospects now lie in the hands of Mittleman, which has argued against such a low valuation for the company and says it will boom after the crisis.