Australia’s Village Roadshow Subject of $523 Million Takeover Bid

THOR RAGNAROK  Still 1 - Publicity - H 2017
Courtesy of Marvel Studios

Private equity company Pacific Equity Partners is offering a 21.9 percent premium on the studio-to-theme park group's stock price.

Australian film and entertainment conglomerate Village Roadshow Ltd (VRL) has announced that it has received a $523 million (A$761.2 million) takeover offer from Australian-based private equity firm Pacific Equity Partners.

VRL owns a raft of entertainment properties globally, including theme parks in Australia and China, and manages Lionsgate Entertainment World, Hengqin Island. The company's film and TV distribution and production subsidiary Roadshow Pictures includes a stake in FilmNation. There is also a studio subsidiary, Village Roadshow Studios, with a massive site on Australia's Gold Coast, which has attracted major Hollywood productions in recent years including Aquaman, Thor: Ragnarok and Dora and the Lost City Of Gold. It also owns Australia's largest cinema chain, Village Cinemas, with 600 screens.

VRL is also a 20% shareholder of Village Roadshow Entertainment Group (VREG), a content development and production entity. In 2017 New York-based Vine Alternative Investments acquired a controlling interest in VREG (Boston-based Falcon Investment Advisors is a minority shareholder). Sources say VREG will not be impacted by the pending takeover activities related to VRL.

Pacific’s indicative offer of 100 percent of the company values VRL at $2.68 (A$3.90) a share, a 21.9 percent premium on the company's Wednesday closing share price of $2.20 (A$3.20) on the Australian Securities Exchange. VRL shares were placed in a trading halt ahead of the announcement, and have since risen 19 percent.

In a statement, VRL said Pacific was willing to offer a full cash consideration or a combination of cash and scrip in a newly incorporated acquisition entity.

In addition, an associated fund of Pacific has put a call option over 19 percent of VRL stock owned by Village Roadshow Corporation, which is VRL’s largest shareholder and is controlled by the VRL executives .

The Pacific proposal is subject to a number of conditions including the completion of due diligence, arrangement of financing, FIRB approval, and the recommendation of the VRL board.

The VRL board said it is currently considering the proposal and is obtaining advice from its financial and legal advisers and will conduct exploratory discussions with Pacific and assist Pacific with due diligence.

Pacific was not immediately available for comment.

Dec. 19, 3:42 p.m. Updated to include additional information about Village Roadshow Entertainment Group.