THE planned sale of Mayne Pharmaceuticals to US pharma company Cosette has been called off today, with Mayne providing Cosette with notice that it has terminated the scheme implementation deed due to Cosette's breaches of the scheme.
The notice brings to an end a rollercoaster ride that began in Feb this year (PD 21 Feb), when Cosette agreed to buy Mayne for around $672 million based on the share price at the time.
By June, when Mayne shareholders overwhelmingly voted in favour of the acquisition, Cosette had twice attempted to abandon its takeover bid, citing "material adverse change" after weaker-than-expected earnings guidance.
Cosette also pointed to a possible US regulatory issue with one of Mayne's key products, Nextstellis contraceptive pill, with the FDA flagging misleading claims about its risks.
Mayne Pharma rejected the validity of the Cosette's termination notices and commenced proceedings in the Supreme Court of New South Wales to establish that no material adverse change had occurred and the Scheme remained valid - with the Court finding in favour of Mayne.
Proceedings took another turn in Oct when the Australia's Foreign Investment Review Board (FIRB) raised a further obstacle to the Scheme, suggesting that Cosette's acquisition may be "contrary to the national interest".
The FIRB cited concerns that Cosette intends to shut or divest Mayne's TGA and FDA approved manufacturing facility in Adelaide, a plant recently bolstered by an $18 million upgrade and federal grant support.
In an ASX statement today, Mayne said it intends to enforce the costs order against Cosette arising from the Supreme Court of NSW case, and will keep shareholders informed of any further developments in relation to the termination of the Scheme. KB
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