Abrahams king maker in Pacific Smiles battle

Listed dental company Pacific Smiles is the subject of a takeover battle.

A bitter battle looms between Crescent Capital and Genesis Capital for Pacific Smiles, given it’s said there is no love lost between the two suitors.

But, at the end of the day, it all comes down to Alex Abrahams.

Pacific Smiles founder Mr Abrahams holds a large stake in the company with 12.6 per cent, and he’s playing his cards very close to his chest with respect to what way he will vote.

HBF Health has a 10.3 per cent holding and is said to be in favour of Crescent Capital’s recent sweetened deal, backed by the board, where it is offering $1.91 per share, or just over $300m, as is MA Financial with its 13.4 per cent stake and Pacific Smiles co-founder Dr Alison Hughes, with 9.9 per cent.

But, Genesis Capital appears to be digging in and refusing to accept the Crescent Capital deal no matter what the price.

It owns 19.9 per cent of the stock and there needs to be 75 per cent of shares voting in favour for the deal to proceed.

The thinking is Genesis Capital, comprising former executives from Crescent Capital, will want to hold on to its interest and bid again later when the share price subsides after Crescent has trumped its earlier offer.

But, a view in the market is Crescent Capital comprises smart operators and they would not be making their offer best and final, as they have done, if they did not think Mr Abrahams would accept.

The vote is this week so the battle is certainly heating up, and there’s a lot at stake for Crescent, which may be able to make much bigger money on its National Dental Care investment if it bulks up the business by combining it with Pacific Smiles.

And, if Crescent is successful, there’s a chance it returns to the market some time in the future as part of an initial public offering of National Dental Care — with Pacific Smiles in the fold.