Village Roadshow receives fresh takeover offer from BGH Capital

Village Roadshow receives fresh takeover offer from BGH Capital

The heat has been turned up a notch at Village Roadshow (ASX: VRL) with the entertainment company receiving a second takeover proposal in as many months.

Private equity firm BGH Capital (BGH) has offered to acquire all of the shares in VRL for $4 cash per share.

The bid is slightly higher than another takeover offer VRL received at the end of 2019 from Pacific Equity Partners (PEP) who is offering $3.90 per share.

BGH's offer is also a 25 per cent premium to VRL's closing share price of $3.20 per share on 18 December, the last trading day prior to PEP's proposal.

The private equity firm is willing to offer all cash consideration or a combination of cash and unlisted shares in a newly incorporated holding company.

An independent committee established to assess the initial PEP proposal will now commence an assessment of the BGH proposal.

VRL shareholders have been instructed to take no action while the independent committee completes its assessment of both offers.

BGH has been active in acquiring ASX-listed assets, having completed a takeover of education services provider Navitas (ASX: NVT) for $2.1 billion in March 2019.

BGH Capital, along with AustralianSuper and former Navitas CEO and founder Rod Jones, secured its long-awaited first deal after stalking its target for almost six months.

The firm was formed in 2017 and is headed by Ben Gray, who was previously the head of private equity giant TPG in Australia and New Zealand.

It was expected that BGH would embark on an immediate acquisition spree and it partnered with AustralianSuper to offer $4.1 billion for Healthscope, only to be beaten by a higher offer from Canadian giant Brookfield.

The takeover offers from PEP and BGH follow a rocky year for Village Roadshow, which in August saw one of its substantially owned investments iPic Entertainment file for Chapter 11 bankruptcy.

The American cinema chain, in which Village Roadshow owned a 24.4 per cent interest, revealed it would be unable to repay a $10.1 million interest payment to the Employees Retirement System of Alabama (ERSA) and the Teachers Retirement System of Alabama (TRSA).

In total, its debts to ERSA and TRSA amounted to around $204 million.

Village Roadshow also endured the departure of its inaugural CEO Graham Burke who had been in the top job for 30 years.

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