Walker Wayland Australasia member firm, Walker Wayland NSW, has an ongoing relationship with Prime Television to assess potential acquisitions for the group by providing high level accounting and due diligence support.
Recently this included advising on the acquisition of a controlling stake in ASX listed Becker Entertainment and the subsequent sale of Becker’s cinema and film business to Icon Film Distribution, owned by the Australian actor Mel Gibson.
Prime Television contacted Grant Allsopp and Peter MacLean from Walker Wayland NSW about its intention to launch an on-market takeover of Becker Entertainment in early 2007.
Its sole interest in Becker Entertainment was its on-site broadcasting and television production assets. Becker Entertainment also had a cinema and film distribution business, called Dendy Cinema & Film Distribution, which Prime Television wanted to on-sell to another party. At this stage, the Becker family had indicated interest in purchasing this business.
Dolphete, the investment company arm of Icon Film Distribution and a shareholder in Becker Entertainment, challenged this potential off-market sale by approaching the Australian Takeovers Panel for a ruling.
While this ruling was being considered, Prime Television continued to build its shareholding in Becker Entertainment, ultimately ending up with a 70 per cent stake.
The Australian Takeovers Panel ruled that the sale of Dendy Cinema and Film Distribution had to be put on the open market.
To achieve this, Prime Television, via Becker Entertainment, engaged Walker Wayland NSW to prepare vendor due diligence documentation for the sale which, due to the extent of internal controls, focused on accounting and tax compliance rather than a study of future maintainable profits.
The profit study was conducted by ANZ Mergers & Acquisitions and, in combination with Walker Wayland’s work, enabled completion in October 2007 of due diligence documentation and an Information Memorandum for prospective buyers.
A short list of bidders was created with legal firm Blake Dawson establishing an electronic data room for the bidders to access company information on Dendy Cinema and Film Distribution.
Walker Wayland NSW was then involved in answering questions raised by individual bidders, preparing information schedules for the electronic data room and meeting with bidders and their representatives.
Final bids were called and Walker Wayland’s role changed to dealing with contract reviews, specifically looking at taxation and accounting warranties, dealing with significant issues on inter-company loans and accounts and formulating a methodology to construct a net assets adjustment to be applied against the consideration.
Ultimately, Icon Film Distribution was the successful bidder for Dendy Cinema and Film Distribution with a winning cash bid of $21.005 million. The sale was finalised in late February 2008, more than a year after Prime Television first decided to seek a controlling interest in Becker Entertainment.
According to Grant and Peter, the whole process highlighted the depth of knowledge within the Walker Wayland group in providing advice on complex mergers and acquisitions issues. Walker Wayland’s relationship with Prime Television is ongoing.
Grant and Peter can be contacted at Walker Wayland NSW.