Mayne Pharma shares dive 30% after Treasurer flags Cosette buyout concerns
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The news: Shares in Mayne Pharma tanked 30% in morning trade after Federal Treasurer Jim Chalmers said its protracted buyout by US-based Cosette Pharmaceuticals "would be contrary to national interest", as the Foreign Investment Review Board (FIRB) reviews the proposed acquisition.
The numbers: Mayne shares were down 30.2% to $4.33 at 11am AEDT.
Cosette has been trying to terminate its scheme implementation deed to acquire Mayne Pharma for $7.40 per share, citing a material adverse change at the acquisition target.
The context: Chalmers said in a letter to Cosette that his "preliminary view is that the proposed acquisition would be contrary to the national interest, on the grounds that it would negatively impact the Australian economy and community".
The letter states that Chalmers is considering whether he should make orders prohibiting the acquisition.
It also notes that on 24 June — after the NSW Supreme Court rejected Cosette's attempts to terminate the deal — Treasury determined that if the reluctant suitor were to acquire Mayne Pharma, it would seek to dispose of or close its manufacturing site in Adelaide.
Chalmers has outlined the importance of that site to the country's pharmaceutical manufacturing and R&D capabilities.
Mayne Pharma said in an ASX release this morning that it is in agreement over the importance of the site. The company said that it has "consistently communicated" the "valuable nature" of the site to Cosette, and sought consent to engage directly with the FIRB on the matter.
Chalmers, who has not yet made a final decision, has invite submissions from Cosette addressing his concerns. Mayne Pharma noted that Cosette is obligated under the scheme implementation deed to "use its best endeavours" to obtain the treasurer's approval.
FIRB has requested an extension to the statutory deadline of its decision to 1 December. Mayne Pharma has urged Cosette to seek to shorten the extension. Cosette has advised that it proposes to ask FIRB for a final decision by 7 November.
Mayne Pharma said it will today take steps to reschedule the second court hearing in relation to the scheme, which remains subject to court approval.
The source: ASX
