Winners and Losers: SA’s Mayne Pharma dives as US deal controversy continues
Shares in Mayne Pharma collapsed on Friday after the company unveiled a letter from Federal Treasurer Jim Chalmers relating to a complicated takeover of the Adelaide business.
Mayne Pharma shares fell by more than 30 per cent in one day of trading last week after it released details about a letter sent to the SA company’s suitor detailing Federal Treasurer Jim Chalmers thoughts on a proposed takeover.
The SA-based pharmaceutical business was currently embroiled in a takeover by US-based Cosette, which was trying to wriggle out of the deal.
Cosette wanted to terminate its $601 million purchase of the Salisbury-based business, which had already been approved by the courts.
The Federal Treasurer has seemingly been pulled into the narrative, with Mayne Pharma telling shareholders on Friday it had been provided a letter received by Cosette from Jim Chalmers.
That letter indicated the Treasurer’s view that “the proposed acquisition would be contrary to the national interest, on the grounds that it would negatively impact the Australian economy and community”.
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The letter also stated that the Treasury was considering whether he should make orders prohibiting the acquisition.
He was particularly concerned that if Cosette were to acquire Mayne Pharma, “its current intention is to seek to dispose of, or close, the manufacturing site in Adelaide”. Mayne said the letter went on to describe Chalmer’s view about the importance of the site to the nation’s pharmaceutical manufacturing and R&D capabilities.
Mayne said it agreed with the Treasurer about the importance of the site, and said it had been consistently communicating that to Cosette since June.
“Mayne Pharma has sought Cosette’s consent to engage directly with FIRB in relation to communications made by Cosette to FIRB after Cosette purported to invalidly terminate the scheme, such consent has not been provided,” Mayne said.
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“Mayne Pharma has not been permitted to, and has not had, any direct communications with FIRB, the Treasurer or any other governmental agency in respect of the FIRB approval or the Salisbury site.”
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Shareholders – including veteran funds manager Anton Tagliaferro – reportedly were outraged over the letter, and feared Chalmers was playing into the hands of Cosette.
As reported by the Australian Financial Review, Tagliaferro said the threat to close the manufacturing plant was “complete nonsense” and that “it was just being said by Cosette to wriggle out of the takeover”.
“The preliminary view provided by the treasurer is exactly what Cosette and its team of lawyers were hoping for and should be seen as another blatant and cynical move to get out of a deal that had been already approved by shareholders,” he said.
Mayne now hoped the FIRB would make a final decision on the takeover by November 7.
Resolution Minerals remained a Winner this week, having announced the proposed takeover of an antimony mill and tungsten stockpiles near its Horse Heaven mine in Idaho, USA.
Maggie Beer was also in the Winners list, rising on the back of big backers including San Remo’s Maurice Crotti and Bickford’s Angelo Kotses joining its cap table.
The full list of Winners and Losers for the week ended October 31:
Data via Baker Young Limited analysts.
