MYX mayne pharma group limited

Cosette Case Weak

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    Hedge Fund Harvest Lane believes its case to cancel the Mayne Pharma takeover is weak.

    See AFR article below published this afternoon.
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    Hedge fund bets US suitor won’t get out of Mayne Pharma takeover

    Joanne TranMarkets reporter
    Jul 10, 2025 – 3.38pm


    Ben Bailey helps oversee Harvest Lane Asset Management’s Absolute Return Fund. The Sydney-based mergers and acquisition’s arbitrage fund oversees about $200 million in assets.

    On Mayne Pharma, why are you betting the company will succeed in forcing US private equity suitor Cosette to complete its $672 million takeover, despite it terminating the deal last month?
    It’s not unheard of for a bidder to suffer buyer’s remorse, but getting out of a deal requires more substance than just electing to pay a break fee. Perpetual found out the hard way a few years back with the Pendal scheme of arrangement. Elon Musk famously tried to get out of his Twitter deal but was ultimately compelled to complete. The bar for a bidder to be absolved of its contractual obligations is a high one, and rightfully so.

    Harvest Lane’s Ben Bailey says Cosette is unlikely to be able to get out of a multimillion-dollar acquisition of Mayne Pharma.  Louise Kennerley
    Cosette clearly has buyer’s remorse, but we don’t think there is a basis for them to walk from the deal. They have alleged and not yet substantiated that there has been a material adverse change to Mayne’s business, which Mayne disputes. It’s now due to be heard before the courts in September, while the market has written the deal off due to the resulting uncertainty.
    There is minimal precedent in Australian case law for it to be litigated, but some recent cases in the UK should be instructive as to how the Mayne case may proceed, and in that context Cosette’s case looks weak.

    They have pointed to a “soft” first quarter trading update, but the softness came in January and February and predates their entry into the agreement. They’ve pointed to a recent lawsuit against Mayne, which is just the latest development in a dispute that runs all back to 2022. There’s also letter from the US Food and Drug Administration that took issue with a single marketing presentation for one of Mayne’s contraceptive products. The matter is already closed out, and we’re yet to find a company that has had a material adverse hit to sales after receiving a similar letter.
    To us, it looks for all money that Cosette just hasn’t done its due diligence properly, rather than any material change to Mayne’s business since signing. With shares trading slightly north of $5 against a deal price of $7.40, it’s a decent reward if we get it right.
 
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