How the fight over $672m pharma deal became a 'watershed' moment for ASX takeovers
Investors and lawyers say US-based Cosette's attempt to back out of a takeover of Mayne Pharma will reshape the way deals are done on the ASX whether it succeeds or not.
When New Jersey-based diversified drugmaker Cosette Pharmaceuticals struck a deal to acquire ASX-listed women's health and dermatology specialist Mayne Pharma back in February, it hailed the move as a "transformative step" for its business.
Now its attempt to terminate the deal could prove to be even more transformative, with the potential to reshape the way deals are done on the ASX.
“In modern financial markets, M&A in Australia, this is about to be our watershed precedent case that we all refer to forevermore,” fund manager Harvest Lane’s chief investment officer Luke Cummings told Capital Brief.
The reluctant US suitor's use of an exit clause with little precedent sets the stage for a high-stakes court battle. Whether it succeeds or not, the episode is likely to change how lawyers draft schemes of arrangement, M&A experts say, and force sellers to demand tougher protections to prevent their deals from falling apart.
