Cosette confirms plan to terminate $672 million Mayne Pharma deal
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More news: US-based Cosette Pharmaceuticals has confirmed termination of its $672 million acquisition of Mayne Pharma and will “vigorously defend its valid termination” against the ASX-listed company’s attempt to push the deal through.
Cosette Pharmaceuticals said in a statement on Wednesday evening it has terminated the scheme implementation deed (SID) effective immediately and has given Mayne Pharma notice of a breach of the Mayne representation and warranty contained in the deed.
“The termination of the SID follows a 10-business day consultation period which concluded without a successful resolution of the identified issues,” a Cosette spokesperson said.
“The termination of the SID follows Cosette’s notification of a Material Adverse Change (MAC) pursuant to the terms of the SID, following a series of events, including Mayne Pharma’s FY25 trading update in April and the receipt and disclosure of a letter from the [US Food and Drug Administration] referenced in Mayne Pharma’s announcement to the ASX on 14 May, which have caused Cosette to form a view that a MAC has occurred.”
On Wednesday afternoon, Mayne Pharma said it rejects Cosette’s claim that a material adverse change has occurred and therefore argues it has no legal grounds to terminate the deal.
"Mayne Pharma intends to enforce its rights under the SID, including to approach the Court to challenge the validity of the Cosette Termination Notice, and if appropriate, any purported termination associated with the Cosette Additional Notice," Mayne's announcement to the exchange reads.
Mayne maintains that no MAC has occurred and also announced to the exchange earlier in the day that it had addressed the US FDA’s concerns.
Mayne shares closed 5.3% down at $4.48, well below Cosette's initial takeover offer in February of $7.40 per share.
Mayne Pharma tanks as Cosette seeks termination of $672m takeover
More news: Mayne Pharma shares dived after US-based suitor Cosette Pharmaceuticals told the drug company it wants to terminate its proposed $672 million acquisition.
Mayne Pharma shares were down 10.2% at 2pm AEST, having added more than 6% earlier in the session.
Cosette confirmed that it plans to terminate the proposed acquisition on the grounds that a material adverse change has occurred, according to Mayne's statement to the exchange.
If the deal is not called off based on Cosette’s termination notice, the US-based company will accuse Mayne of breaching its representation and warranty as outlined in the scheme implementation deed agreed to in February. It will then move to terminate the deal within five business days of that notice.
Mayne Pharma intends to reject the termination notice, reiterating its position that no material adverse change has occurred.
Mayne Pharma jumps after announcing Cosette yet to back away from takeover
More news: Drug company Mayne Pharma’s share price has lifted following news that US-based Cosette Pharmaceuticals has not yet terminated a proposed $672 million takeover, although it still may.
Shares in Mayne Pharma were up 5.9% to $5.01 at 12:43pm, which is still below Cosette’s proposed takeover price of $7.40 per share.
Mayne Pharma says Cosette yet to confirm if it will revoke $672m takeover bid
The news: Mayne Pharma says its US-based suitor Cosette Pharmaceuticals suitor has not yet sent it a termination notice but may still proceed with pulling out of a proposed $672 million takeover of the ASX-listed drug company.
Mayne also said it has satisfied concerns raised by the US Food and Drugs Administration (FDA), which were among the concerns Cosette raised about the deal.
The numbers: Mayne Pharma’s share price last closed at $4.73, well below the proposed takeover price of $7.40.
The context: With no formal deal termination letter received from Cosette Pharmaceuticals at the end of a mandatory consultation period triggered by the suitor’s material adverse change concerns, Mayne maintains its view that these concerns are unfounded.
Cosette still has the option to terminate the deal prior to the second court date under the terms of the scheme implementation deed, Mayne said, adding it intends to take reasonable steps to enforce its rights and has reminded the US-based company to progress with Foreign Investment Review Board approval.
In the same announcement to the exchange, Mayne also noted that it has received a closed letter from the US Food and Drugs Administration that said the regulator’s concerns have been addressed.
The FDA previously sent a letter claiming Mayne Pharma had misrepresented the risks of its birth control pill Nextsellis in a promotional presentation. The company has repeatedly told the exchange that these concerns were not materially significant.
