Village Roadshow suitors continue work despite coronavirus disruption

BGH submitted a bid of A$4.00 per share in January, valuing the business at approximately A$783 million ($536 million). It offered an all-cash consideration or a combination of cash and unlisted shares in a newly created holding company. Several weeks earlier, PEP said it was willing to pay A$3.90 per share.

The stock spiked 23% following the PEP bid and subsequently traded in a range of A$3.80-3.90. It surpassed A$4.00 when BGH entered the fray. Village Roadshow was at A$1.10 at of mid-afternoon trading on March 20, having shed two-thirds of its value in the space of 10 days. The market capitalization is around A$212 million.

The company said that delays in the release of new movies would have a “significant adverse impact” on its cinema business. Meanwhile, the theme parks division has experienced a reduction in visitors, especially those from overseas. Forward bookings and annual pass sales are lower as well. A range of cost savings have been implemented, including salary and bonus cuts for senior executives, asking employees to take unpaid leave, and freezing non-essential capital expenditure.

Village Roadshow said in a statement that it could not provide meaningful earnings guidance, given the dynamic and uncertain nature of the impact of COVID-19 on its business. It added that PEP and BGH are continuing their work, though there is no certainty that a transaction will materialize. Local media previously reported that neither PE firm is likely to submit offers at the level of their indicative proposals.

The company has 577 cinema screens across 57 sites in Australia. It operates properties such as Sea World, Warner Bros Movie World, Australian Outback Spectacular, and Wet’n’Wild in Australia as well as several international properties. Village Roadshow is also involved in film and television production. Revenue came to A$980.5 million for the 2019 financial year, up from A$952.8 million in 2018. Over the same period, the net loss widened from A$3.4 million to A$9.6 million.

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• Topics
• Australasia
• Media
• Buyouts
• Consumer
• Australia
• Pacific Equity Partners
• BGH Capital
• coronavirus