So will the re-opening of some of its Gold Coast theme parks help Village Roadshow get a deal with private equity player, BGH Capital over the line by the deadline of June 30 (which is next Tuesday)?
The two companies can extend the due diligence BGH is now doing for an extra two weeks, but the market remains cautious on a bid. The re-opening of the theme parks was among the conditions BGH wanted to see met as it conducted the due diligence.
Two of the major parks will re-open tomorrow at 50% capacity (another is already trading) and a 4th won’t open until mid-July.
But even though the parks will re-open soon it is hard to see them attracting big crowds as airline travel is weak, the new Victorian outbreak will see a lot of people in Melbourne especially reluctant to travel with the school holidays starting on Friday, and the border with NSW remains all but shut.
The shares fell 2.7% to $2.16 yesterday compared with the mooted offer price of $2.40, suggesting investors do not expect a deal or a counter offer.
A US hedge fund has been buying shares in Village and has told media it sees a higher offer price will be needed but has not moved to launch an offer, so far. The failure of the share price to trade close to the $2.40 figure from BGH indicates a further offer won’t be arriving any time soon.
Village announced yesterday that it’s Sea World and Paradise Country will open tomorrow (Friday), after the Topgolf Gold Coast park re-opened on June 12. The Australian Outback Spectacular is set to open its doors on Friday, July 3. Movie World and Wet ’n’ Wild will resume operations on Wednesday, July 15.
Village said it was aiming to open its metro Melbourne cinemas by late July, depending on Victoria’s coronavirus restrictions. That might be all too soon for any firm agreement to be done with BGH.
The company on Wednesday said it is still seeking to increase its debt financing facilities and is in advanced discussions with its existing bank syndicate and the Queensland Government.
“While VRL continues to take measures to conserve capital, the increase in debt facilities will provide VRL liquidity as it moves into a phased reopening of its Gold Coast theme parks and cinema circuit,” the company said in a release.
“Any funding provided by the Queensland Government will be used to support VRL’s theme parks in Queensland, and will be directed towards retaining employees, safety and maintenance and important capital expenditure projects.”
Village has no near-term debt maturities in its group debt facility and has received confirmation from its lenders that they will not apply financial covenants as at 30 June.
Village said its Gold Coast theme parks have been given the all-clear to reopen at 50% capacity. The company said Queensland government had approved the COVID Safe plans for the parks, following the resumption of its Tasmanian cinema circuit and the pending reopening of its regional Victorian theatres later this week.
