An Aussie private equity firm that has been shortlisted as a suitor for Virgin Australia is also eyeing a takeover of another prominent travel industry player.
Village Roadshow, which operates well-known theme parks Warner Bros. Movie World, Wet’n’Wild and Sea World, along with a host of cinemas across the country, revealed to shareholders yesterday that it is in negotiations with BGH Capital over a potential privatisation takeover.
In a statement posted on the ASX, Village Roadshow said it had received a revised, non-binding proposal from BGH to acquire all of the company’s shares by way of a scheme of arrangement at a price of up to $2.40 per share.
The offer consists of a base price of $2.20 per share, plus an additional 12 cents per share in the event that Movie World and Sea World have re-opened to the public three business days prior to the day Village Roadshow shareholders meet and vote on the transaction.
The additional eight cents per share is in the event that a majority of the company’s cinema locations have re-opened to the public three business days prior to the day shareholders decide on the deal.
Village Roadshow noted that the additional offer price is also subject to certain other conditions as set out in the transaction process deed.
BGH has proposed two transaction structures as part of its revised proposal, which is subject to various conditions.
These include the completion of confirmatory due diligence, the arranging of debt financing, the negotiation of transaction documentation, and approval from the Foreign Investment Review Board.
The revised offer is a lot lower than the initial one BGH made in January, which was priced at $4 per share.
BGH – which is also one of the four parties in the running for the collapsed Virgin Australia – has been granted exclusive access to Village Roadshow’s books for an initial four-week period to facilitate a binding offer.
In a separate announcement yesterday, Village Roadshow said it has implemented a number of measures to conserve capital and maintain operating liquidity, “whilst ensuring that the business is in a strong position to re-open venues when appropriate”.
As at 30 April 2020, Village Roadshow had a net debt position of approximately $284 million, comprising $342 million of gross debt and $58 million of readily available cash. The company expects a net debt position of approximately $315 million at 30 June 2020.
Featured image: Facebook/Warner Bros. Movie World