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10 August, 2020

FINALLY! Village Roadshow agrees to takeover deal with failed Virgin bidder

Theme park operator Village Roadshow has agreed to be acquired by BGH Capital, following months of exclusive discussions between the two parties.

If approved, the deal will see the private equity firm take control of Village Roadshow by way of two alternative but concurrent schemes of arrangement representing total value of up to $2.45 per share.

While the deal is not subject to arranging financing or due diligence, it is contingent on the reopening of its theme parks (which include Warner Bros. Movie World, Wet’n’Wild and Sea World) and cinemas, and Queensland borders being open to any person from New South Wales and Victoria.

Village Roadshow said its shareholders intend to remain as the “significant, committed shareholders” in the privatised business and Clark Kirby will remain as CEO, with Robert Kirby as executive chairman and Graham Burke as co-chairman.

The company said it intends to send an explanatory booklet to shareholders in October 2020, which will also contain an independent expert’s report on whether the acquisition is in their best interests.

Village Roadshow expects to hold a scheme meeting in November and, if approved, the takeover by BGH would be implemented shortly thereafter.

Talks between both parties have dragged on since May, with Village Roadshow having announced a number of extensions to these discussions in recent weeks and months.

The deal will somewhat make up for BGH’s failed attempt to become the new owner of beleaguered airline Virgin Australia.

News of the transaction agreement came a day after Village Roadshow announced that it had secured an additional $70 million in funding from existing lenders and the Queensland Treasury Corporation.

The company expects this additional debt facility will be sufficient for it to fund its cash needs for the next 12 months.

As part of securing the new facilities, Village Roadshow is looking to raise a minimum of $35 million through new shareholder equity or equity-like instruments.

The company said this will be completed by the earlier of its half-year results announcement in February 2021 or three months after the termination of a transaction with BGH.

Featured image source: Village Roadshow

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acquisition BGH Capital scheme of arrangement takeover Village Roadshow