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Australia’s Village Roadshow Limited has begun exclusive sale talks with BGH, one of two finance companies that at the beginning of the year made takeover approaches to the company. The company also said that keeping its cinemas, film studios and theme parks closed is costing it $6.45 million to $9.68 million (A$10-15 million) per month, even after government subsidies for staff salaries.

Village Roadshow Limited owns one of Australia’s largest cinema circuits, film distribution company Roadshow Pictures and the Village Roadshow Studios at Gold Coast in Queensland. It also owns 31% of New York-based sales and production company FilmNation, and 20% of Village Roadshow Entertainment Group (VREG), a U.S-based content development and production firm.

On Monday it revealed the complicated, exclusive, but non-binding terms of its next stage of negotiations with BGH. The finance company has agreed to offer up to A$2.40 per VRL share, a price which compares favorably with less than A$1 per share in mid-March when the coronavirus outbreak first shut down VRL’s businesses. But the offer is substantially lower than the pre-COVID-19 prices of A$3.90 per share offered by PEP in December and the A$4 that BGH offered in January.

The new bid would be reduced by A$0.12 per share if the Warner Bros. Movie World theme park is not back in operation by the time that VRL shareholders meet to discuss the transaction. It would also be reduced by A$0.08 per share if 75% of VPL’s cinemas are not back in action.

Shareholders will also be asked to consider two different options, a mixture of cash and shares in an unlisted bid company, or an all cash transaction at a lower price.

VRL’s largest shareholder block says it plans to remain a substantial shareholder after privatization, and that Clark Kirby would be expected to remain VRL’s CEO, and Robert Kirby its executive chairman.

In its trading update VRL said: “VRL’s Gold Coast theme parks (Warner Bros. Movie World, Sea World, Wet’n’Wild and Paradise Country), Topgolf, American Outback Spectacular and the film studios remain closed. VRL’s entire cinema circuit, including those sites operated by VRL’s partner Event, also remain closed.”

The group said that at the end of April it had net debts of $183 million (A$284 million, comprising A$342 million of debt and A$58 million of cash) and that it forecasts net debt of $203 million (A$315 million) by the end of June. It said that is currently in discussions to increase borrowings and that it does not expect lenders to enforce financial covenants by June 30.

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