Shares in Mayne Pharma soared by 11.3 per cent following a Supreme Court of NSW ruling on Wednesday. The court decided that American pharmaceutical company Cosette cannot terminate its proposed $672 million takeover of the ASX-listed Mayne Pharma. The final decision regarding the acquisition now rests with the Foreign Investment Review Board (FIRB).
Mayne Pharma, headquartered in Adelaide, manufactures contraceptives and menopause medications. The company initiated legal action against Cosette to enforce the $672 million takeover agreement after the US-based firm attempted to withdraw from the deal. Cosette had initially made the takeover offer in February but later stated in May that it was reviewing the agreement due to a perceived “material adverse change” in Mayne Pharma’s performance. This led to Cosette issuing a termination notice in early June.
Cosette, a company that owns a diverse portfolio of medicine and pharmaceutical products, contended that Mayne Pharma had failed to disclose vital information before the takeover bid was made. Mayne Pharma refuted Cosette’s termination notice, asserting that there had been no material change in its performance.
Justice Ashley Black ultimately ruled in Mayne Pharma’s favour. This decision effectively prevents Cosette from unilaterally backing out of the agreed-upon takeover, pending the regulatory review by FIRB.
