After a year-long battle, approval has finally been given for the $440 million Village Roadshow Limited (VRL) to be taken over by private equity firm BGH.
BGH has locked horns with Pacific Equity Partners (PEP) over the last year with the two buyout firms trying to outmuscle each other over Village Roadshow.
The move signals the end of several years of uncertainty and stand-offs which had a seismic effect on the company’s finances. Shares at the start of 2020 were worth half their valuation from 2014.
Village Roadshow said its net debt was in the region of A$311 million at the end of October – it is expected to reach up to A$380 million by June 2021. The company has been further impacted by the COVID-19 pandemic with theme parks and cinemas forced to shut during 2020.
A shareholder meeting held last week gave approval to two takeover schemes, A and B, reports Variety. The federal court agreed to Scheme A – this prices VRL shares at A$3 each which gives the company an implied valuation of A$585 million ($440 million). It’s in stark contrast to BGH’s A$770 million offer back in January of this year.
Share trading ends this afternoon and it is expected that the takeover will complete by December 29th.
BGH Capital is a private equity firm based in Melbourne. It was established in 2017 by former investment bankers Robin Bishop, Ben Gray, and Simon Harle. BGH took over Perth-based education provider Navitas in a A$2.3 billion deal in 2019. It is also involved in a takeover bid for Virgin Australia Holdings, the company that owns and operates Virgin Australia.
A wide entertainment portfolio
VRL started as a drive-in cinema in 1954. It now owns a wide portfolio of entertainment assets, including 57 cinemas with 577 screens, and film distribution company Roadshow Distribution. It is equally well-known for its stable of theme parks which include Sea World in Queensland, alongside Warner Bros. Movie World (WBMW).
VRL has a 31 percent stake in the FilmNation, a New York-based film sales and finance company. It also owns 20 percent of Hollywood film financier Village Roadshow Entertainment Group. The company operates Lionsgate Entertainment World at Novotown, the IR and entertainment hub on Hengqin Island, Zhuhai, China.