Mayne Pharma Acquisition Faces Unacceptable Circumstances Over $7.40 Share Deal
The Takeovers Panel has declared unacceptable circumstances in the Mayne Pharma acquisition after Cosette Pharmaceuticals changed its intentions to close the Salisbury manufacturing site, raising concerns over market transparency and regulatory approval.
- Takeovers Panel declares unacceptable circumstances in Mayne Pharma acquisition
- Cosette Pharmaceuticals changed plans to close or dispose of Salisbury manufacturing site
- Market was uninformed of change in intentions between June and September 2025
- Court ruled no material adverse change occurred, keeping acquisition agreement valid
- Panel orders Cosette to comply with Treasurer’s conditions to protect Salisbury site
Background to the Dispute
Mayne Pharma Group Limited, an ASX-listed pharmaceutical company with significant US operations and a manufacturing site in Salisbury, South Australia, has been at the centre of a takeover controversy. The US-based Cosette Pharmaceuticals agreed to acquire Mayne Pharma for $7.40 per share through a scheme of arrangement, subject to regulatory approvals and no material adverse changes.
Cosette initially disclosed intentions to maintain Mayne Pharma’s operations largely unchanged, including retaining employees at the Salisbury site. However, after serving termination notices alleging breaches and material adverse changes, which the court later invalidated, Cosette communicated a revised plan to dispose of or close the Salisbury manufacturing site.
Panel’s Declaration of Unacceptable Circumstances
The Takeovers Panel found that Cosette’s change of intentions was not disclosed to the market in a timely manner, leaving shareholders and the market uninformed between late June and early September 2025. This lack of transparency undermined the principles of an efficient, competitive, and informed market, especially given that shareholders had already voted on the scheme based on earlier disclosures.
The Panel highlighted that Cosette’s revised plans jeopardised the prospects of receiving Foreign Investment Review Board (FIRB) approval, a critical condition for the acquisition’s completion. The Panel’s declaration of unacceptable circumstances reflects concerns about bidders potentially using changes in intentions to disrupt transactions contrary to market fairness.
Regulatory and Market Implications
Following the Panel’s decision, Cosette is now required to agree to any reasonable conditions imposed by the Treasurer related to the Salisbury site, including restrictions on its closure, provided these conditions align with prior disclosures. This move aims to safeguard the site’s operations and the over 200 jobs it supports.
Despite the court ruling that no material adverse change occurred, keeping the scheme implementation deed valid, the Treasurer has expressed preliminary concerns that the acquisition may be contrary to national interest, particularly due to the potential impact on Australia’s pharmaceutical manufacturing capabilities.
Looking Ahead
The unfolding situation places significant pressure on Cosette to navigate regulatory hurdles while managing shareholder expectations and operational realities. The outcome of FIRB’s final decision and any imposed conditions will be pivotal in determining the future of Mayne Pharma’s Australian operations and the broader acquisition.
Bottom Line?
The Mayne Pharma acquisition saga underscores the delicate balance between corporate intentions, market transparency, and national interest in cross-border deals.
Questions in the middle?
- Will FIRB ultimately approve the acquisition given national interest concerns?
- What specific conditions might the Treasurer impose to protect the Salisbury site?
- How will Cosette’s revised intentions affect Mayne Pharma’s Australian workforce and operations?
