Key Pacific Smiles shareholders to reject ‘opportunistic’ Genesis Capital bid

The board of takeover target Pacific Smiles has urged shareholders to reject the “opportunistic” bid by Genesis Capital, sending the persistent suitor back to the drawing board.

Genesis associate Beam Dental Bidco earlier this month lobbed a $1.90 a share offer that valued Pacific Smiles at just over $300 million.

The fresh offer lobbed on September 17 came just a month after Pacific Smiles shareholders defied the board by voting against rival bidder Crescent Capital’s $2.05 a share offer.

But Pacific Smiles on Monday said shareholders MA Financial Group and co-founder Alison Hughes would not accept the Genesis offer.

Dr Hughes owns a 9.94 per cent stake, and MA Financial Group a 13.43 per cent in Pacific Smiles, which means the offer’s 90 per cent minimum acceptance condition cannot be met. Meanwhile, Genesis has a 19.9 per cent voting power in Pacific Smiles.

The Pacific Smiles board has now also recommended other shareholders reject the Genesis offer by doing nothing about it.

Pacific Smiles said Genesis had not come back with an improved offer from its revised proposal of $1.90 a share lobbed in late July.

“Pacific Smiles’ recently released FY24 results demonstrate the operating momentum in the business including strong utilisation improvement in newer cohorts, its continued cash flow generation and healthy net cash position,” Pacific Smiles said in a statement.

Genesis earlier this month said the recent resignations of Pacific Smiles chief executive Andrew Vidler and chief financial officer Matthew Cordingley had triggered “uncertainty” in the company.

But Pacific Smiles on Monday said the Genesis offer was “opportunistically timed” given the “in progress changes to the leadership team who will focus on a refreshed strategy to drive operational performance through both technology and commercial drivers”.