Prominent buyout firm BGH Capital is on the brink succeeding with a revised takeover bid for embattled theme parks and cinema operator Village Roadshow despite an ongoing revolt by major independent shareholder, New York-based Mittleman Brothers.
BGH, which is led by high profile dealmakers Ben Gray and Robin Bishop, has hit several snags along the way in its attempt to buy the owner of the Wet n’ Wild and Seaworld theme parks and other film distribution assets because the company’s two biggest independent shareholders Mittleman Brothers and Spheria Asset Management were unhappy with the initial offer on the table. But BGH’s final offer, worth up to $3 per share, is now expected to succeed and put an end to the year-long rollercoaster ride after proxy votes submitted over the weekend showed signs of shareholder approval.
Sources briefed on the votes submitted over the weekend who spoke on the condition of anonymity said the Board is expecting scheme A – which values the company’s shares at $3 – could be approved based on the number of votes already in favour of the deal.
The sources said dissident shareholder Mittleman, which owns more than 15 per cent of the company, has used some of its shares to vote against the $3 per share offer but is expected to decide on what to do with its remaining shares at the scheme meeting on Monday.
The New-York based firm may have the sway on the register to defeat the scheme at $3 per share but it may be unable to prevent a second scheme, worth $2.95 per share, from succeeding. The second scheme can be voted for by the founding Kirby Family and former chief executive Graham Burke (which have a combined shareholding of 40.4 per cent), which makes Mittleman’s stake too small to block the offer on its own.
Mittleman could use the rest of its shares to try and block scheme A but as it is almost certain scheme B will succeed, it could opt for the higher bid.
Chris Mittleman, chief investment officer at Mittleman Brothers said the Kirby family and Mr Burke should not be allowed to vote.
“We believe the independent executive report is irrefutably defective and shamelessly outcome-driven, and that the Kirby/Burke Group sit on both sides of the coercive transaction in both schemes and thus should not be allowed to vote on Scheme B, just like they’re not allowed to vote on Scheme A, and the smoke and mirrors they put up in attempt to obfuscate that reality are obvious,” Mr Mittleman said.
Mr Mittleman has threatened legal action against the directors and an independent committee for recommending the bid and recently released a 21-page presentation last month raising his concerns with the independent report and the offer.
Spheria, which owns 7.8 per cent of ASX-listed Village, has already said it intends to vote in favour revised offer but the intention of Mittleman remains unclear.
Village has been troubled since a bitter and public family feud between the Kirby brothers in 2019 over the leadership and direction of the company. BGH first proposed to buy Village shares for $4 last January, valuing the company at more than $770 million. But the coronavirus pandemic forced Village to close its cinemas and theme parks for part of this year and social distancing restrictions significantly affected cash flow. The company still has an enormous debt pile and is fighting an Australian Tax Office ruling for $11 million.
Source: Thanks smh.com