Never Ending: Village Roadshow Takeover Talks Keep Rolling

By Glenn Dyer | More Articles by Glenn Dyer

The desperation to get a deal done with its private equity suitor has seen Village Roadshow give BGH Capital yet another extension of its exclusive negotiating period until, wait for it, today, Thursday.

That’s the 4th and smallest extension provided by the owner of SeaWorld and Warner Bros Movie World since it agreed to takeover talks with BGH Capital in May.

Village Roadshow entered exclusive discussions with the private firm after receiving a second $2.40 non-binding proposal from BGH. The first was pre-COVID-19 in January at $4 a share.

The $2.40 a share offer forced Village Roadshow to agree to the takeover talks and since then they have gone nowhere, as has the due diligence by BGH.

Success seems to be linked to the re-opening and activity levels at the Gold Coast theme parks.

The resurgence of COVID-18 in Victoria and NSW has resulted in the Queensland government closing its borders completely on Wednesday.

That should be enough to end the talks or perhaps produce a lower price for a deal. But why would bGH want to own a bunch of theme parks that are expensive to keep ticking over or operating and just drawing patrons from parts of Queensland?

But any deal with BGH Capital could be blocked by Village Roadshow’s largest independent shareholder, Mittleman Brothers.

The New-York based fund manager has previously said a sale at a $2.40 a share offer would be “shameful”. The Mittleman fund now owns 16.59 million shares in Village and which is a 8.5% stake and enough to block any deal because management insiders and the Kirby family would not be able to vote their holdings in a meeting to approve any scheme of arrangement.

The management and Kirby interests actually have more interest in a continuing relationship with BGH.

Village shares closed down more than 2% at $2.12.

It seems investors are undecided and really don’t really care, if they did the price would be closer to $2.40.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

View more articles by Glenn Dyer →