Ann: Mayne Pharma enters Scheme Implementation Deed with Cosette, page-125

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Hadrian

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23/02/25

18:12

Post #: 77986000
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Originally posted by Hiddenvalue: ↑

Sorry folks more than likely no special dividend coming as likely it will have been disclosed as part of the bid consideration. I have seen bids in the past with cash and special dividend disclosed.

Often a fully franked dividend can be used as part of the bid consideration as a sweetener to the target shareholders as this can reduce the capital gain and take advantage of the franking credits for certain investors who have a lower marginal rate.

The franking credits flown through on the dividend component benefits low marginal rate tax payers in that it produces a better after tax outcome. How so? If your marginal rate is lower than the corporate tax rate like smsf's or low income earners then your overall consideration increases due to triggering a tax refund or reduction to your tax payable depending on your overall tax position.from the franking credit attached to the dividend.

This should have been a genuine consideration in formulating the scheme consideration to maximise shareholders returns.

This may not have been an important consideration in our case as many MYX shareholders are realistically in the POO with their investment and sitting on substantial unrealised (about to be realised) capital losses.

Having a portion of the proceeds as a special dividend would be detrimental to shareholders who face a marginal tax rate above 30% as you will then be paying top up tax on receipt of the dividend rather than paying no tax on the capital loss.

An important consideration is that Foreign Investors do not benefit from the franking credits either.

A special dividend would have reduced the cash consideration paid by the purchaser as a buyer hands over cash for all of the net assets in the target entity which includes cash on hand. Therefore bidder would have likely advised that they would like the offer price reduced by the dividend so the overall consideration has not changed as they are working on a set valuation.

With the above said, I would be very surprised if we got a dividend announcement.

WHERE TO NOW

i think our most likely chance of extracting a better outcome is the hope that another bidder comes in and makes a bid knowing that the current bid is supported by the board and two major shareholders. This is a signal to the market we have effectively hit reserve price on an open auction and that now is the time to make a bid or lose the potential of securing MYX. Hopefully the corporate advisers had numerous entities in hr data rooms when advising the market we are up for sale.

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@Hiddenvalue this is a good analysis of the situation and like you I hope that other bidders are around. A good result on Wednesday may help.

MYX Price at posting: $7.20 Sentiment: Buy Disclosure: Held
2 Upvote

1 Great analysis

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(20min delay)
Last $5.32		Change 0.100(1.92%)		Mkt cap ! $426.5M

Open	High	Low	Value	Volume
$5.29	$5.32	$5.15	$88.88K	16.91K

Buyers (Bids)

No.	Vol.	Price($)
9	617	$5.30

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Price($)	Vol.	No.
$5.33	380	2

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No.	Vol.	Price($)
10	2659	5.260
4	2037	5.250
2	477	5.240
1	50	5.230
2	542	5.220

Price($)	Vol.	No.
5.280	149	5
5.290	890	4
5.300	1805	3
5.310	400	2
5.320	73	2

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