Theme park takeover ‘the best thing that could happen’
THEME park giant Village Roadshow will go "next level", fast-track new development and quell an internal family struggle if a $1 billion takeover bid is successful, industry experts say.
The operator of the Gold Coast's popular Movie World, Sea World and Wet 'n' Wild theme parks has received a takeover bid from private equity firm Pacific Equity Partners worth as much as $1 billion.
The proposed deal comes as Gold Coast-based theme parks CEO Clark Kirby prepares to take over the reins next year as boss of the whole company. Mr Kirby's family has been in a bitter internal feud with uncle and deputy chair John Kirby being critical of the younger Kirby's appointment as CEO.
Expert industry sources said yesterday if the Pacific takeover goes ahead it would take the heat out of the family feud.
"Yes definitely, this is the best thing that could happen," one said, adding of the potential deal: "This will propel Village into another level altogether. This would give so much firepower to Village."
Another source said it would open up extra possibilities for future additional theme park enhancement and development: "It's exciting, it's very positive. It means Village will also be able to fast-track what it is working on."
Village is splashing out $50 million on its New Atlantis theme park with three new thrill rides including a coaster next to Sea World.
Village Roadshow told the ASX in a statement - as part of a scheme of arrangement at an indicative price of $3.90 per share - yesterday that: "PEP has indicated it is willing to offer full cash consideration or a mix of cash and scrip."
Shares surged 17.8 per cent after the announcement to $3.77 in a day of trading. The PEP deal values the company at $761.2 million, not including debt.
The board of Village Roadshow advised its shareholders to take no action and added it was considering the proposal.
"VRL will inform shareholders of the outcome of the discussions with PEP as soon as it is in a position to do so," the company said in a release. The company's shares had been placed in a trading halt at $3.20 ahead of the announcement.
Destination Gold Coast chairman Paul Donovan said if the takeover happened, it was essential Mr Kirby and Village theme parks COO Bikash Randhawa remained in place.
"Clarke and Bikash have taken Village Roadshow and all its theme parks to a new level," he said. "They are continuing to invest to make the theme parks more attractive.
"Whatever happens, either they stay and run it the way they have or the board accepts the offer and keep the management there because there's no question that they have done an unbelievably good job."
Mr Donovan said the offer was unsurprising.
"There are people around fishing all the time and I'm not surprised that Village has been offered a deal to be quite honest. It has performed in an exemplery way particularly since Clarke has been at the helm."
Mr Kirby, Mr Burke and Mr Randhawa declined to comment yesterday. The company had a strong year for its theme parks, with pretax earnings growing almost 100 per cent, to $76.5 million, from $38.3 million the previous year.