The drawn-out takeover saga involving Mayne Pharma Group Ltd (ASX: MYX) appears to be drawing to a close, with the company saying it will move to strike out the agreement.
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.
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Cosette's doubt emerge
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 regard to Mayne's business, including a trading update in April and certain correspondence with the US Food & Drug Administration (FDA).
Mayne, at the time, denied that the arguments put forward by Cosette constituted a material adverse change as defined in the scheme implementation deed for the deal and stated that the company would challenge Cosette's right to withdraw.
As Mayne Pharma said in a statement to the ASX in May:
Mayne Pharma maintains its position that all information relevant to the financial position of Mayne Pharma has been disclosed to the market in the earnings announcement released on 22 April and that there is now new information required to be disclosed in light of the contents of the Cosette notice.
Mayne took the matter to court, winning a ruling in the New South Wales Supreme Court, which denied Cosette's bid to back out of the deal.
Plant closure plans doomed the bid
But the proposed transaction also had a political element, with Cosette's plans to close Mayne's Adelaide-based drug manufacturing plant piquing the interest of the Foreign Investment Review Board and Treasurer Jim Chalmers.
The Treasurer wrote to Cosette in October, saying 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''.
That preliminary notice was followed by a formal notification in November that the Treasurer had objected to the proposed takeover.
Mayne said at the time:
As a result, Mayne Pharma is disappointed to inform shareholders that the FIRB condition precedent to the scheme will not be satisfied such that the scheme is unlikely to proceed.
Late on Wednesday this week, Mayne said in a statement to the ASX that it "has not been able to reach any position with Cosette that might allow the scheme to proceed''.
Mayne said it had issued a notice to Cosette "in relation to Cosette's material breaches of the scheme implementation deed with Mayne Pharma considers were wilful and intentional''.
Mayne said it now had the right to terminate the scheme "if the relevant circumstances set out in the notice of intention to terminate continue to exist for five business days, being to 10 December''.
Mayne shares traded as high as $7.31 when the takeover was first announced, but are now changing hands for just $3.36, not far off their 12-month lows of $3.27.
