Health Check: Mayne Pharma shares tumble after suitor threatens to walk over ‘adverse events’ Tim Boreham1 hour ago
Investors have birched shares in takeover target Mayne Pharma (ASX:MYX) after the company today revealed a dispute with its suitor over what constitutes an ‘adverse material change’ to the business.
Mayne shares are now trading almost 40% lower than Cosette Pharmaceuticals’ $7.40 a share offer price, which suggests little hope of the bid being executed on current terms.
According to Mayne, a note from Cosette notice refers to the “circumstances associated” with Mayne’s April 22 earnings update, “previously disclosed” litigation with Therapeutics MD over a licensing deal and “certain correspondence” with regulators.
The latter refers to the US Food & Drug Administration (FDA) accusing Mayne of misrepresenting the safety risks of its contraceptive pill, Nextstellis.
Cosette alleges Mayne failed to consult on the adverse changes in good faith for 10 business days, as required under the scheme implementation deed.
Mayne contends there was nothing to consult about, in that the matters outlined “did not establish the pre-requisites for a material adverse change.
”It’s always a case of ‘he said, she said’ in marital disputes, innit?
Cosette says the consultation obligations are “enlivened” and the bidder intends to comply with them. But failing a “satisfactory outcome”, it will walk.
Mayne holders were due to vote on the scheme of arrangement on June 18, but probably can wash their hair or walk the dog instead.
MYX Price at posting:
$4.53 Sentiment: None Disclosure: Held
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