Winners and Losers: Mayne Pharma slides with takeover in doubt
Salisbury-based pharmaceutical company Mayne Pharma has hit a snag after its relationship with a takeover suitor started to dissolve.
Mayne Pharma has fallen back to February levels after a takeover suitor commenced a process to terminate its purchase of the Salisbury-based business.
Announced last Wednesday, Mayne said US-based Cosette triggered a clause in the scheme implementation deed by which the parties will consult for 10 days in good faith – a precondition to a party seeking to exercise rights to terminate the deal.
Cosette announced in February it would acquire all the shares in Mayne Pharma. The $601 million deal was nearly completed, with the Court already approving the purchase plan earlier this month.
In a letter to shareholders, Mayne said it was of the view that no “material adverse change” has occurred and that it rejected the contentions in Cosette’s notice.
“The Cosette Notice does not currently quantify the full financial impact of the cumulative matters that Cosette assets… and in Mayne Pharma’s view does not otherwise establish the pre-requisites for a Mayne Material Adverse Change,” Mayne said.
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“Cosette has also indicated that if the consultation process does not achieve a satisfactory outcome for Cosette, it intends to issue a notice to terminate the SID at the end of the consultation period.
“Mayne Pharma remains open to engaging in dialogue with Cosette with a view to resolving the matters raised by Cosette.”
Shares in MYX fell by 25.62 per cent over the week, but had already been on a downward spiral since early May.
The decline in its share price was enough for the ASX to quiz the company on the slide in mid-May, but the company said it was “not aware of any information concerning it that has not been announced to the market which… could explain the recent trading in its securities”.
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Nepenthe owner Australian Vintage was another Loser after warning sales declines had continued in the current financial year.
As a result, the company said it would suffer a $13 million cash flow loss instead of a breakeven result as forecast. It will also be left with a higher inventory than expected and debt levels will remain high at $76 million by 30 June.
The company said it hoped for a recovery in sales in the next financial year, but it will take at least three years to get through its stacked inventory.
The full list of Winners and Losers for the week ended 23 May:
Data via Baker Young Limited analysts.
