BGH Capital to lift Village Roadshow takeover offer

Melbourne-based private equity firm BGH Capital has lifted its bid for cinema, film and theme parks operator Village Roadshow after two major independent shareholders rejected its earlier offer.

Market sources told The Sydney Morning Herald and The Age that BGH will offer two scheme arrangements which value the theme park and cinema operator’s shares at about $3, a significant improvement on the current proposals worth $2.32 and $2.22 respectively.

The bids for Village Roadshow value the group at $2.32 and $2.20 a share.
The bids for Village Roadshow value the group at $2.32 and $2.20 a share. Credit:Scott McNaughton

Village entered a trading halt on Thursday morning after the Herald and The Age revealed a second major independent shareholder would vote against the existing takeover offer. Spheria Asset Management, which owns 7.8 per cent of ASX-listed Village, said it would vote against two takeover structures proposed by the Melbourne-based buyout firm under the current terms. Spheria co-founder and portfolio manager Matthew Booker previously said $3 was a fair price, meaning it’s likely the firm will accept a revised bid.

Spheria’s decision came days after the company’s biggest independent shareholder, US-based Mittleman Brothers, increased its stake in the company to 14.4 per cent. Mittleman chief investment officer Chris Mittleman said he $5 per share was more reasonable.

The two companies hold a combined 22.2 per cent of the cinema and theme parks operator, enough to block the first scheme of arrangement – a $2.32 per share offer – and almost enough to thwart scheme B – a $2.22 per share offer – even without the votes of other shareholders. This meant that BGH’s only choice was to revise the bid or walk away altogether.

Village, which owns Sea World and Wet n Wild said the trading halt is pending an announcement. Shares were at $2.45 before suspension of trading.

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