Private equity firm Genesis Capital has sweetened its bid for Pacific Smiles, valuing the Australian dental chain at A$316.4 million ($208.38 million) in what it called its “best and final” offer.
Shares of Pacific Smiles gained as much as 3.2% to A$1.95 on Monday, hitting their highest since early August, while the benchmark stock index was down 0.5%.
U.S.-based Genesis, which has been chasing Pacific for about a year, has now offered A$1.9825 for every share in the dental centre operator it does not already own. Genesis currently owns a 19.9% stake in Pacific.
It had offered A$1.90 apiece in September, which Pacific rejected on valuation concerns and was also resisted by two major shareholders, MA Asset Management and co-founder Alison Hughes. MA Asset and Hughes together own a 23.3% stake in Pacific, according to LSEG data.
MA Asset did not immediately respond to a Reuters’ request for comment, while Hughes could not be reached.
In the new offer, Genesis dropped the 90% minimum acceptance condition, which was part of the September proposal.
Pacific’s independent expert looking into the bids had recommended the board to accept an offer within the A$1.80 to A$2.17 range.
Earlier, the Pacific board had found that Genesis’ A$1.90 per-share bid was materially lower than rival bidder National Dental Care’s (NDC) A$327.1 million takeover offer.
NDC is longer in the race to acquire Pacific Smiles. It terminated its offer after a scheme meeting where Pacific shareholders voted against the proposal.
Genesis also expressed concerns regarding Gary Carroll’s appointment as Pacific’s CEO and MD, given his lack of experience in leading a healthcare business.
It also noted that the dental group has had four chief executives and two chairs in the last 14 months.
Source: Reuters.com