Australia’s Mayne Pharma falls as treasurer considers blocking Cosette’s $437 million bid

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(Reuters) -Australia’s Mayne Pharma said on Friday it had received a letter from its potential acquirer, Cosette, indicating that the country’s treasurer is considering blocking the A$672 million ($436.67 million) proposed buyout of the company. 

Shares in Mayne Pharma were down 30.7% at A$4.3, as of 0015 GMT. The stock slumped nearly 40% to A$3.81 in its weakest intraday performance, and touched the lowest point since August 2024.

According to the letter, the treasurer had indicated its “preliminary view was that the proposed acquisition would be contrary to the national interest”, as it could negatively impact the Australian economy and community.

Cosette has been trying to terminate its offer, after the U.S.-based company said in May that it would review the deal because of a “material adverse change” in Mayne’s performance.

Mid-October, an Australian court stopped the U.S. drugmaker from abandoning the takeover of Mayne Pharma.

Mayne further said the letter noted that, in late June, Cosette had re-evaluated its intentions regarding the Australian company’s local operations, as advised to the treasury.

Cosette had also advised that, at the time, it intended to consider disposing of or closing Mayne’s manufacturing site in Adelaide. Mayne added that the letter did not cite any other basis for the treasurer’s preliminary view.

The ASX-listed firm does not think it would be commercially rational to close the site and has consistently communicated this to Cosette since the U.S. pharmaceutical company informed Australia’s Foreign Investment Review Board (FIRB).

Mayne Pharma said it had asked Cosette for a chance to communicate directly with the FIRB after Cosette moved to terminate the deal, but the request was declined.

As a result, Mayne has been unable to communicate with the FIRB, the treasurer or any other relevant government agencies regarding the approval process or matters related to the Salisbury site.

Cosette or the office of the treasurer did not immediately respond to a Reuters request for comment.

($1 = 1.5389 Australian dollars)

(Reporting by Rishav Chatterjee in Bengaluru; Editing by Anil D’Silva, Rashmi Aich and Sherry Jacob-Phillips)