AFR suggests it is all about earnings which based on the excerpt...

AFR suggests it is all about earnings which based on the excerpt below does not sound good.

The gist of it is Mayne’s maintainable earnings. If they drop by more than $10.76 million over a 12-month period (subject to a bunch of exceptions including pre-disclosed matters), it will have a material adverse change.

If the M&A barney is as simple as Mayne’s earnings falling off a cliff, then it is hard to see how Mayne isn’t guilty as charged.

Mayne reported $31 million underlying earnings before interest, tax and depreciation for the first half on February 26 (five days after signing its scheme implementation deed with Cosette). It told shareholders it “expects to grow underlying EBITDA in the second half of the 2025 financial year via revenue growth and cost leverage”.

While it’s a bit of a choose-your-own adventure outlook statement, it suggested at least $62 million EBITDA for the full year to June 30 and was a big upgrade to analysts’ forecasts. Perhaps it explained the knockout takeover bid, they thought.

Two months later, Mayne was back with new guidance of $47 million to $51 million EBITDA, or as much as a 123 per cent uplift on the prior year. While Mayne’s statement was all about growth, that earnings number was well shy of what was implied at the half-year.