The battle for control of the perennially underperforming Village Roadshow continues. This time it’s a major investor in the market buying shares and trying to block private equity group BGH’s takeover of the theme park and cinema owner.
A notice to the ASX yesterday reveals that US group, Mittleman Investment Management increased its stake in Village Roadshow last week from 12.9% to 14.4% after buying 2.8 million shares through its subsidiary Aimia Inc.
However, it appears to have paid only a fraction of the market price with the change of interest form saying Aimia paid $1 million for 2.2 million shares, or 46c a share, on 12 November 12 when Village Roadshow shares closed at $2.53.
And then the following day it paid $596,798 for 645,970 shares, or 92 cents a share, on November 13 when shares closed at $2.47.
The news saw Village shares rise 2% to $2.45 as investors wondered where the bid would end up in 8 day’s time.
Mittleman chief investment officer Chris Mittleman has already revealed his intention to block the bid when it is put to a vote on November 26 .
He has threatened to sue the directors of Village and an independent committee for their alleged failure to discharge duties to shareholders.
Legal threats are commonplace in contested takeovers. Usually the lawyers get rich.
By buying shares, Mittleman is trying to make it harder for BGH, which is led by Ben Gray and Robin Bishop, to succeed in buying the theme parks and cinema operator.
Village Roadshow directors have backed the BGH bid and done a provisional deal that gives BGH rights to their 42% of the company. That’s can’t be voted at a shareholder meeting to approve the bid, so Mittleman’s current staake could be enough to stymie the transaction at next week’s meeting.
Village and BGH announced a takeover proposal in August whereby investors could receive up to $2.45 a share in the company, which owns Sea World, Warner Bros Movie World and Wet’n’Wild theme parks on the Gold Coast.
One structure offered shareholders a base price of $2.20 a share and up to 25 cents a share was cash dependent on the reopening of theme parks, cinemas and Queensland borders. Brothers John Kirby and Robert Kirby and former chief executive Graham Burke control about 42% of the company, but cannot vote under this scheme.
A second scheme offered a lower $2.10 a share offer with up to 25 cents in additional payments. The Kirby brothers (who are the major shareholders) and Mr Burke (another big shareholder) can vote on this structure.
But the public opening of Village’s Warner Bros, Movie World and Sea World theme parks only triggered a 12¢ lift in BGH Capital’s takeover bid, raising the two offers to $2.32 a share or $2.22 a share.
The additional 13 cents a share was contingent on the reopening of state borders and cinemas, is now off the table.
