Shares in Mayne Pharma Group Ltd (ASX: MYX) have fallen by more than 30% after it was revealed the federal government could step in to block a troubled potential takeover of the company.
US company Cosette Pharmaceuticals Inc launched a $7.40 per share takeover bid for Mayne in February, with the offer a 37% premium to the Mayne share price at the time.
But Cosette later tried to back out of the deal, arguing that there were a number of factors that constituted a "material adverse change" with regards to Mayne's business, including a trading update in April and certain correspondence with the US Food & Drug Administration (FDA).
Mayne denied Cosette's claims and took the matter to court, winning a ruling in the New South Wales Supreme Court recently, which denied Cosette's bid to back out of the deal.
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Government could step in
But it has now emerged that Australian Treasurer Jim Chalmers could step in to block the deal on national interest terms.
Mayne told the ASX in a statement today that Mr Chalmers had written to Cosette, indicating that his "preliminary view is that the proposed acquisition would be contrary to the national interest, on the grounds that it would negatively impact the Australian economy and community".
The statement goes on to say:
The letter states that the Treasurer is considering whether he should make orders prohibiting the acquisition contemplated by the Scheme. Treasury was advised that Cosette had re-evaluated its intentions concerning Mayne Pharma's business in Australia and determined that if Cosette were to acquire Mayne Pharma, its current intention is to seek to dispose of, or close, the manufacturing site in Adelaide.
The letter, Mayne said, went on to say that the Treasurer believed the company's Adelaide site was important to Australia's "pharmaceutical manufacturing and research and development capabilities".
Mayne said it agreed with the Treasurer regarding this view.
Given the valuable nature of the site, Mayne Pharma does not consider that it would be commercially rational to close the site and has consistently communicated this to Cosette since Cosette informed the Foreign Investment Review Board of its stated change of intention on 24 June 2025.
Mayne said the letter from the Treasurer had invited submissions from Cosette about his concerns, and the Australian company said that no final decision had been made by the Treasurer, meaning Cosette was still "obligated … to use its best endeavours to obtain the Treasurer's approval of the scheme''.
Mayne shares fell as low as $3.81 on the news before recovering to be 30.2% lower at $4.33 by mid-morning.
