Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>MA Financial (13.43% of shares out) and Alison Hughes (9.94%) said they will reject Genesis A$1.8675/share offer for <a href="https://www.smartkarma.com/entities/pacific-smiles-group-ltd" target="_blank" data-smartkarma-citation="entities:2891:1" rel="noopener">Pacific Smiles (PSQ AU)</a>; therefore the 90% acceptance condition cannot be met.</li>
<li>Separately, PSQ's board also rejected terms, as Genesis Offer is below NDC's A$2.05/share Offer; plus terms are "opportunistic" as they do not account for PSQ's recent strong financial improvement. </li>
<li>What now? Genesis has the flexibility to bump. Expect that to occur. They won't fold their tent in response to this latest development.</li>
</ul>


MA Financial (13.43% of shares out) and Alison Hughes (9.94%) said they will reject Genesis A$1.8675/share offer for Pacific Smiles (PSQ AU); therefore the 90% acceptance condition cannot be met.
Separately, PSQ's board also rejected terms, as Genesis Offer is below NDC's A$2.05/share Offer; plus terms are "opportunistic" as they do not account for PSQ's recent strong financial improvement. 
What now? Genesis has the flexibility to bump. Expect that to occur. They won't fold their tent in response to this latest development.


Pacific Smiles: Key Shareholders Reject Genesis' Terms

<ul>
<li>After Crescent Capital 's National Dental Care' (NDC) A$2.05/share Offer, by way of Scheme, failed on the 9 August. it was just a question of when Genesis re-loaded its Offer.</li>
<li>Genesis has now announced a <a href="https://announcements.asx.com.au/asxpdf/20240917/pdf/067yp3mz2w0mbt.pdf" target="_blank" rel="noopener">A$1.90/share off-market Offer</a> (<a href="https://announcements.asx.com.au/asxpdf/20240729/pdf/0660k38ywr0ry3.pdf" target="_blank" rel="noopener"> its 29 July A$1.90/share approach was a Scheme</a>), conditional on a 90% minimum acceptance. Pricing falls within the IE' fair value range.</li>
<li>
<a href="https://www.smartkarma.com/entities/pacific-smiles-group-ltd" target="_blank" data-smartkarma-citation="entities:2891:1" rel="noopener">Pacific Smiles (PSQ AU)</a>'s board previously gave unanimous support for NDC's prior A$1.90/share Offer. The question is whether the 90% hurdle is met. I think it will.</li>
</ul>


After Crescent Capital 's National Dental Care' (NDC) A$2.05/share Offer, by way of Scheme, failed on the 9 August. it was just a question of when Genesis re-loaded its Offer.
Genesis has now announced a A$1.90/share off-market Offer ( its 29 July A$1.90/share approach was a Scheme), conditional on a 90% minimum acceptance. Pricing falls within the IE' fair value range.

Pacific Smiles (PSQ AU)'s board previously gave unanimous support for NDC's prior A$1.90/share Offer. The question is whether the 90% hurdle is met. I think it will.


Pacific Smiles (PSQ AU): Genesis' Off-Market A$1.90/Share Offer

<ul>
<li>After what appeared indecisiveness from Genesis Capital, Crescent Capital's National Dental Care snuck in on the 29th April and entered into a Scheme with <a href="https://www.smartkarma.com/entities/pacific-smiles-group-ltd" target="_blank" data-smartkarma-citation="entities:2891:1" rel="noopener">Pacific Smiles (PSQ AU)</a> at A$1.90/share. </li>
<li>The Scheme Meeting is the 1st August with expected implementation on the 19th August. The IE (Deloitte) reckoned terms are fair &amp; reasonable. All good right? Not quite.</li>
<li>The Takeovers Panel has concluded Genesis Capital, with 19.9% of shares out, is free to vote. Assuming Genesis votes against the Scheme, Crescent Capital's Offer is effectively dead.</li>
</ul>


After what appeared indecisiveness from Genesis Capital, Crescent Capital's National Dental Care snuck in on the 29th April and entered into a Scheme with Pacific Smiles (PSQ AU) at A$1.90/share. 
The Scheme Meeting is the 1st August with expected implementation on the 19th August. The IE (Deloitte) reckoned terms are fair &amp; reasonable. All good right? Not quite.
The Takeovers Panel has concluded Genesis Capital, with 19.9% of shares out, is free to vote. Assuming Genesis votes against the Scheme, Crescent Capital's Offer is effectively dead.


Pacific Smiles' (PSQ AU) Scheme Vote: Say “aaaarrrghhhh”?!

<ul>
<li>On the 18th December 2023, <a href="https://www.smartkarma.com/entities/pacific-smiles-group-ltd" target="_blank" data-smartkarma-citation="entities:2891:1" rel="noopener">Pacific Smiles (PSQ AU)</a>, an operator of dental centers, <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02754994-2A1494957" target="_blank" rel="noopener">announced and rejected</a> a A$1.40/share non-binding proposal from Genesis Capital. Genesis subsequently increased its stake to 19.90%.</li>
<li>Genesis then bumped its NBIO to A$1.75/share on the 19 March and was granted due diligence on a non-exclusive basis. PSQ said it would support the revised terms if firmed. </li>
<li>
PSQ has now entered a Scheme with National Dental Care at A$1.90/share. The Offer also requires FIRB signing-off. But the proposal is a non-starter if Genesis rejects terms. </li>
</ul>


On the 18th December 2023, Pacific Smiles (PSQ AU), an operator of dental centers, announced and rejected a A$1.40/share non-binding proposal from Genesis Capital. Genesis subsequently increased its stake to 19.90%.
Genesis then bumped its NBIO to A$1.75/share on the 19 March and was granted due diligence on a non-exclusive basis. PSQ said it would support the revised terms if firmed. 

PSQ has now entered a Scheme with National Dental Care at A$1.90/share. The Offer also requires FIRB signing-off. But the proposal is a non-starter if Genesis rejects terms. 


Pacific Smiles (PSQ AU): A Brace Of Offers

<ul>
<li>For the month of November 2024, 14 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$15bn.</li>
<li>The average premium for the new transactions announced (or first discussed) in November was ~44%. The average premium YTD is ~43%.</li>
<li>This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.</li>
</ul>


For the month of November 2024, 14 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$15bn.
The average premium for the new transactions announced (or first discussed) in November was ~44%. The average premium YTD is ~43%.
This compares to the average premium for transactions in 2023 (117 transactions), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) of 39%, 41%, 33%, 31%, and 31% respectively.


(Mostly) Asia M&A, Nov 2024: Net One System, Amcor/Berry, I D & E Holdings, SG Fleet, Macromill

Australia

Pacific Smiles Group Limited owns and operates dental centers. The Company's centers provide preventative care, diagnosis and treatment for patients with a broad range of dental care requirements.

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Pacific Smiles (PSQ AU)

Pacific Smiles: Key Shareholders Reject Genesis' Terms

Pacific Smiles (PSQ AU)'s board caves and now recommends shareholders accept the Offer. Genesis Bidco now holds 32.93%, which the board reckons is...

David Blennerhassett