Village Roadshow’s revolting shareholders

Austereo parent company Village Roadshow is facing shareholder instability and revolt over its share buyback scheme and its dividend payments.

Two investors have successfully “stalled the company’s buyback scheme” and “raised the spectre of a takeover bid” according to financial analysts.

In its bid to expand into major film production projects the company took on a $1.17 billion debt facility and suspended dividend payments, causing two major investors to put pressure on the company and mount the court case.

Last November, shareholders voted in favour of the buyback
scheme, but by then a German company had bought 1000 ordinary shares and 1000 preference
shares and lodged court action claiming Village had misinformed shareholders
about their voting rights. The court action was successful, which forced Village
to hold a second vote on the scheme.

In the second vote another shareholder opposing the scheme emerged and also voted against the scheme.

As a result of the actions the company’s shares dropped 16 cents this week, wiping nearly $60 million from the value of the company as investors wondered what the next steps would be.

Village believes “the overwhelming majority of shareholders” still support the scheme and that it may win an appeal on the issue.