Village Roadshow receives $1 billion takeover offer
20 December 2019, Written by Paris Faint
Village Roadshow has received a takeover offer worth almost $1 billion from Pacific Equity Partners (PEP), the investor behind a diverse array of companies including UP Education and Patties Foods.
PEP has confirmed it is willing to offer a full cash consideration or a combination of cash and scrip for the Movie World parent.
The board has confirmed it is exploring its options in respect to the offer but says shareholders should refrain from acting just yet.
"The Board believes that shareholders' interests are best served by conducting exploratory discussions with PEP to determine whether a proposal that is in the best interests of VRL shareholders can be put forward," says the company.
The takeover offer by PEP follows 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.
Burke's resignation was tendered amid reports of a bitter stoush between former Village Roadshow executive John Kirby and his brother, Village Roadshow chairman Robert Kirby, who were locked in a feud concerning the company's future.
Reportedly John Kirby was pushing for new leadership and direction for the company, while Robert Kirby remained in staunch opposition to any changes.
The altercation also allegedly focused on whether the company would sell off its underperforming divisions.
Regarding its possible takeover, Village Roadshow says it will inform shareholders of any outcomes as soon as it is able to do so.
At the time of writing (10:49am AEDT), VRL stock has dipped 2.96 per cent to trade at $3.77.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Author: Paris Faint