Pacific Smiles Group response to non-binding proposal

Pacific Smiles Group Limited (ASX:$PSQ) has rejected the unsolicited, non-binding indicative proposal from Genesis Capital Manager I Pty Ltd to acquire all of its shares for $1.40 in cash per share. Genesis Capital has acquired an economic interest in 29.9 million Pacific Smiles shares, representing 18.75% of the issued capital. The Board, after assessing the proposal with advice from its financial and legal advisers and speaking with major shareholders, considers the proposal opportunistic and materially undervaluing Pacific Smiles.

Board's assessment of the proposal

The Board acknowledges the disappointing share price performance but expresses confidence in the company's prospects, particularly with the recent appointment of Mr Andrew Vidler as Managing Director. It considers the proposal as opportunistic and materially undervaluing Pacific Smiles. The Board is focused on maximizing shareholder value and intends to offer limited access to non-public information to determine if Genesis Capital can formulate a materially improved proposal.

Summary of Pacific Smiles Group's response

Pacific Smiles Group Limited (ASX:PSQ) has rejected the non-binding indicative proposal from Genesis Capital, citing its confidence in the company's prospects and the belief that the proposal undervalues the business. The Board highlighted the strategic value of Pacific Smiles, its strong cash flows, and capital base, and the significant synergies that the proposal does not reflect. The company also released a trading update and FY24 guidance, expressing a forward EV / EBITDA multiple of 8.1x based on the mid-range of FY24 Underlying EBITDA guidance and a 12% discount to the 52-week high of $1.59. Pacific Smiles shareholders are advised not to take any action at this time in response to the proposal.