Village Roadshow Ltd (ASX: VRL) today provided a further update on its proposed acquisition by BGH Capital announced on 7 August, 2020. The news has had a lacklustre effect on the Village share price which, at the time of writing, has edged 0.47% lower to $2.10. This compares to the All Ordinaries Index (ASX: XAO) which has risen 1.1% to 6,127 points.
Takeover agreement
The Village share price is flat today after the company announced that, under the agreement, its shareholders will receive up to $2.45 per share.
The offer will be either a $2.20 (structure A) or $2.10 (structure B) base price plus up to 25 cents per share, should the company be able to meet certain conditions. They include the reopening of theme parks and 75% of its cinema business reopening as well as Queensland border restrictions eased.
The implantation agreement is expected to be finalised on 16 December, 2020.
COVID-19 impact
The entertainment company has been severely hit by COVID-19 lockdown restrictions. Village Roadshow saw its entire cinema exhibition, theme parks and film distribution close, putting the company at a material loss.
As Australia has been improving its management of the outbreak, however, Village Roadshow has been slowly opening its services. Theme parks are open but operating at a reduced capacity, and its film distribution is coming back online.
The cinema business, predominately in Victoria, is focused on the reopening with pricing and tactical initiatives. It could be December however, before any cinemas open to the public in that state.
About the Village share price
The Village share price has had an eventful year, reaching as high as $4.10 in January from the initial bidding war between BGH Capital and Pacific Equity Partners. The Village share price then fell to a low of 77 cents in March due to COVID-19 wreaking havoc on economic activity around the world. However, the Village share price now appears to be settled around its current levels where it has spent the majority of last four months.
