Pacific Smiles shareholders reject NDC takeover
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The news: Shares in dental services chain Pacific Smiles dived after shareholders defied the board by voting down a proposed takeover by NDC BidCo.
The numbers: Pacific Smiles shares tumbled 7.7% to $1.87 by 2:55pm AEST.
About 63.3% of the total number of votes cast by shareholders were in favour of NDC's scheme, which meant the resolution was not passed.
Rival suitor Genesis Capital, which had its own takeover offer of $1.90 per share topped by NDC's improved bid of $2.05 per share last week, holds a 19.9% stake in Pacific Smiles, and told the group it would vote against the resolution.
The company noted that as the scheme was not approved the permitted dividend of 7 cents per Pacific Smiles share would not be paid. The board approved final dividend for FY24 would be announced at the release of its earnings on 28 August.
The context: Pacific Smiles' board had determined that NDC's counterproposal would "produce a superior outcome to shareholders as a whole" when compared to the offer by private equity firm Genesis.
The company's directors unanimously recommended that all Pacific Smiles shareholders vote to approve the takeover by NDC, a subsidiary of NDC HoldCo and operator of National Dental Cares centres.
Meanwhile, Pacific Smiles said it remains "unclear" if it will pursue Genesis' latest bid on the same terms. Even if it does, the company noted, "there is no guarantee that any transaction will eventuate or on the same terms at all".
What they said: Pacific Smiles chair Zita Peach said: "Throughout this process, the board has focussed on maximising value for shareholders, ensuring Pacific Smiles shareholders were well informed and given the opportunity to vote".
"Whilst it was always going to be challenging for the NDC Scheme to be successful with Genesis Capital stating it would vote against, the board wanted to give the opportunity for shareholders to vote on the NDC Scheme," she said.
"Despite the NDC Scheme not proceeding, it has been encouraging to see the level of interest in Pacific Smiles from multiple parties and the endorsement of its brand, network and prospects."
The source: ASX announcement
