ASX-listed dental company Pacific Smiles Group Ltd (ASX: PSQ) has received a takeover bid from its majority shareholder, Genesis Bidco, at a 37.5% premium to the share price prior to the bid announcement.
The bidder, which currently owns 89.27% of Pacific Smiles, has offered $2.20 in cash for each share in the company it doesn't already own, compared with the closing price on Thursday of $1.60.
Pacific Smiles has established an independent committee to assess the bid, and that committee has unanimously recommended that shareholders accept the offer in the absence of a superior bid.
The committee has also commissioned an independent expert's report into the bid, to assess whether it is fair and reasonable; however, the company said Deloitte Corporate Finance, which would produce the report, at this stage concluded that the bid was in the best interests of shareholders.
The independent board committee has carefully considered the offer to assess whether it is in the best interest of Pacific Smiles shareholders other than Genesis Bidco and its associates and, having completed that work, unanimously recommends that shareholders accept the offer.
The takeover offer is unconditional and is not subject to regulatory approval.
Takeover virtually a fait accompli
The company stated in its ASX announcement on Friday that a competing bid was highly unlikely, given the dominance of the majority shareholder and the fact that the next largest shareholder held a 10.01% stake in the company.
This meant the remaining shareholders own just 0.72% of Pacific Smiles.
The company in August reported an underlying profit of $11.8 million for FY25, up from $8.5 million the previous year, on revenue of $196 million, up 9.1%.
The company spent $11.6 million during the year responding to two previous takeover offers from Genesis Bidco and another vehicle, NDC Bidco, with the money allocated to legal fees and external consulting.
The earlier Genesis takeover offer was launched in July last year and offered $1.90 per share for the company, or a combination of cash and stock in the bidding company.
Pacific Smiles shareholders voted against the NDC proposal at a meeting held in August last year. NDC then walked away from the bidding process, and Genesis relaunched its offer and started building up its stake in the company.
Pacific Smiles shares are thinly traded, with an average trade volume of about 1500 shares.
The company was valued at $258.6 million at the close of trade on Thursday.
