BGH Capital agrees cut-price Village Roadshow buyout in wake of coronavirus shuttering

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Australian theme park and cinema operator Village Roadshow has agreed to a cut-price offer from BGH Capital as it looks to recover from the impact of the coronavirus crisis.

BGH had previously offered A$4 per share for Village Roadshow in January, outdoing the A$3.90 being offered by Pacific Equity Partners, which would have valued Village Roadshow at about A$516m.

But Covid-19 threw that deal into chaos, and the new deal agreed by Village Roadshow prices the buyout at just A$2.45 per share.

The slashed deal prices came in the wake of Village Roadshow having to shutter its Warner Bros Movie World and Sea World parks and its cinemas due to the Australian coronavirus lockdown.

The deal is contingent on the re-opening of Village Roadshows theme parks and cinemas, and also on the Queensland borders being re-opened to visitors from New South Wales and Victoria.

Village Roadshow said its the independent committee of its board of directors unanimously recommended the BGH deal in the absence of a superior proposal.

Committee chairman Peter Tonagh said, “The IBC has worked diligently, together with its advisers, to consider a range of alternatives since it first received a proposal from Pacific Equity Partners on 19 December 2019 and from BGH on 24 January 2020.

“Over that period of time there has been a significant change in VRL’s financial position and trading environment.

“Having regard to the options available, including continuing as an independent listed company, the IBC has unanimously concluded that the BGH transaction is in the best interests of all VRL shareholders, in the absence of a superior proposal, and subject to an independent expert concluding that the BGH transaction is in the best interests of VRL shareholders.

“The BGH Transaction provides the opportunity for all VRL shareholders to realise an attractive cash price for all of their VRL shares, in a very uncertain operating environment.”

Village Roadshow shareholders will also have the opportunity to elect to retain an equity interest in an unlisted VRL entity that is controlled by BGH.

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