NDC BidCo Raises Offer to $1.91 per Share for Pacific Smiles Group
PSQ (PSQ) Share Update July 2024 Monday 22nd
NDC BidCo Increases Offer to $1.91 per Pacific Smiles Share
Pacific Smiles Group Limited (ASX: PSQ) has announced that NDC BidCo Pty Ltd has increased its offer to acquire 100% of Pacific Smiles shares to $1.91 per share, marking the highest bid to date.
Instant Summary:
- NDC BidCo increases the Scheme Consideration to $1.91 cash per Pacific Smiles Share.
- This is NDC BidCo’s best and highest price, subject to no higher third-party offers.
- Pacific Smiles Directors recommend shareholders vote in favor of the Scheme Resolution.
- The Scheme Meeting is scheduled for 1 August 2024 at 11:30am (AEST).
Details of the Improved Proposal
As of July 23, 2024, Pacific Smiles Group Limited has confirmed that NDC BidCo Pty Ltd has increased the Scheme Consideration to $1.91 per share. This new offer is the best and highest price from NDC BidCo and will not be increased unless a third party makes a superior proposal or the Pacific Smiles Board recommends another offer.
The improved proposal includes a Total Cash Value of $1.91 per share, comprising a Permitted Dividend of $0.07 per share and a Scheme Consideration of $1.84 per share. The Permitted Dividend is expected to be paid on August 8, 2024, while the Scheme Consideration will be paid on August 12, 2024.
Board Recommendations and Shareholder Actions
The Pacific Smiles Directors continue to recommend that all shareholders vote in favor of the Scheme Resolution, provided no superior proposal emerges and the Independent Expert does not change its conclusion that the Scheme is in the best interests of shareholders. The Scheme Meeting is set for August 1, 2024, at 11:30am (AEST) at Automic Group in Sydney and online.
All shareholders on the Scheme Record Date will receive the increased consideration regardless of their voting status. Further details regarding the Improved Proposal will be provided to shareholders later this week.
Financial Implications and Valuation
NDC BidCo's offer represents a 99% premium to the one-month undisturbed volume-weighted average price of $0.96 as of December 15, 2023. It also reflects an enterprise value of approximately 11.4 times the mid-point of FY24 EBITDA guidance, which NDC believes is attractive compared to historical transaction multiples in the sector.
The increased offer from NDC BidCo is likely to have a positive impact on Pacific Smiles' stock price. The 99% premium over the previous average price is significant and may boost investor confidence. However, the final outcome will depend on whether any superior proposals emerge before the Scheme Meeting.
Investor Reaction:
Analysts have generally reacted positively to the increased offer, noting that it provides a substantial premium and reflects confidence in Pacific Smiles' future prospects. Some investors have expressed optimism about the potential for further bids, although NDC BidCo considers this unlikely.
Conclusion:
Investors should closely monitor the developments leading up to the Scheme Meeting on August 1, 2024. The increased offer from NDC BidCo represents a compelling opportunity for shareholders, but the potential for higher bids remains a factor to consider. Shareholders are encouraged to vote in favor of the Scheme Resolution to secure the improved consideration.