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Takeover target Pacific Smiles (ASX: PSQ) may see its clinics filling with more patients after reaching a non-binding Memorandum of Understanding (MoU) with nib (ASX: NHF), allowing the health insurer's members to access preventative gap-free dental across all 117 Pacific Smiles Dental centres from the start of July.
The extension represents a massive lift on the current 11 Pacific Smiles-owned and operated nib Dentalcare centres where nib members can be eligible for fully funded gap-free preventative dental care.
The two companies have had a long-term close working partnership for more than two decades, and currently have a contract in place until May 2027.
The MoU seeks to amend the contract to open up the offering across Pacific Smiles' entire network from 1 July on an exclusive basis in the geographies in which the centres operate for a two-year period.
After the two-year exclusivity period is finished, it is envisioned that the Pacific Smiles Dental centres will form part of a broader nib First Choice Network of dental providers on a non-exclusive basis.
On the other hand, the amendments would also open up nib's possibilities to reach arrangements with clinics in other areas where Pacific Smiles does not operate.
"These changes are subject to the final terms being agreed and execution of the amendment. There is no guarantee a binding agreement will be entered into on the proposed terms or at all," Pacific Smiles clarified in an ASX release.
More than half of the existing nib Dentalcare centres are in NSW with just one in each other state or territory where the brand is present.
The nib Dentalcare brand is not currently active in Western Australia, where Pacific Smiles collaborates with another health insurer HBF at eight clinics. Business News Australia has sought clarification on what the consequences of the MoU might be on that arrangement.
The announcement comes ahead of a scheme meeting in August where Pacific Smiles shareholders will vote on whether to accept a $303 million takeover offer from National Dental Care (NDC), which in April joined the race for a buyout that was started by Genesis Capital, which is known for the Bounce Dentistry brand and snapped up the "Totally Smiles" assets of Gold Coast-based Smiles Inclusive from administration.
After the market closed yesterday, Pacific Smiles revealed that the Takeovers Panel had declared unaccepted circumstances surrounding the disclosure of Genesis affiliate Beam's investments in Pacific Smiles during the proposal period. The panel is yet to determine orders.
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