Genesis Capital lobs fresh $1.90 a share offer for takeover target Pacific Smiles

Genesis Capital is having a fresh crack at takeover target Pacific Smiles just over a month after the east coast dental chain scuttled a higher offer from rival bidder National Dental Care.

Beam Dental Bidco — owned by healthcare-focused Australian private equity group Genesis — has lobbed an off-market takeover offer for Pacific Smiles at $1.90 a share, representing a valuation of $303 million.

Genesis is offering Pacific Smiles shareholders an option to take up $1.90 cash for each share; or one share in the holding entity; or 47.5¢ cash and 0.75 shares in the holding entity for each Pacific Smiles share.

The new offer revealed on Tuesday is equivalent to a previous proposal from Crescent Capital-backed National Dental Care in April.

National Dental Care in early August upped that offer to $2.05 a share, which was publicly supported by shareholders including WA private health insurance giant HBF, Pacific Smiles co-founder Alison Hughes and MA Financial Group.

The offer was ultimately voted down by Pacific Smiles shareholders. Just over 60 per cent of shareholders voted in favour of the NDC scheme, short of the 75 per cent required for the motion to pass.

The shortfall was largely the result of Genesis’ 19.9 per cent voting power in Pacific Smiles.

Pacific Smiles on Tuesday said the latest offer from Genesis “will need to be considered in detail” by the board and its advisers before a formal recommendation.

“The board will also take into account feedback from shareholders and the likelihood of success of the offer,” Pacific Smiles said in a statement.

Among the key reasons Beam highlighted in its proposal for the offer was that it provided Pacific Smiles shareholders “certainty of value and removes the risks inherent in your Pacific Smiles investment”.

This included the “uncertainty associated with Pacific Smiles securing a new CEO and a new CFO and recent changes to the composition of the Pacific Smiles Board”.

Pacific Smiles — which operates more than 130 dental clinics around Australia — earlier this month revealed chief executive Andrew Vidler had handed in his resignation after less than nine months in the top job.

His departure had followed the resignation of the company’s chief financial officer Matthew Cordingley the week prior, and the retirement of chair Zita Peach.

The fresh takeover offer on Tuesday sent Pacific Smiles shares up 6.3 per cent to $1.865.