M&A arb fund Harvest Lane bets Cosette can’t renege on Mayne Pharma deal
Two pharmaceutical companies are locked in a standoff across the Pacific but it’s the Australian minnow that may have the upper hand.
Sydney hedge fund Harvest Lane is betting Adelaide drug company Mayne Pharma could still force its reluctant US suitor Cosette Pharmaceuticals to complete its $672 million takeover, even as the New Jersey-based company threatens to walk away and the market writes off the deal.
Days after Cosette claimed it would scrap the deal – sinking Mayne’s share price – the arbitrage fund manager has continued to build a position in the Australian company, arguing the market has completely misunderstood the state of play.
“It’s a big opportunity,” Harvest Lane managing director Luke Cummings told Capital Brief. “The share price is suggesting the deal is dead but that’s far from true.”
A lone contrarian on this side of the trade, Cummings believes Cosette has no grounds on which to terminate the takeover and may instead be using the threat to negotiate on price.
