Australian court dismisses Cosette appeal to drop Mayne Pharma takeover

Oct 14 (Reuters) – Australia’s New South Wales Court of Appeal on Wednesday rejected Cosette Pharmaceuticals’ bid to terminate its takeover of Mayne Pharma, upholding an earlier ruling that the US-based drugmaker had no valid grounds to abandon the deal.

Here are some of the details:

• Cosette bid A$7.40 per share for Mayne in February last year but later tried to back out, saying a deterioration in Mayne’s financial performance constituted a material adverse change that voided the agreement.

• The NSW Court of Appeal found the decline in Mayne’s sales performance was insufficient to meet the threshold for a material adverse change under the scheme implementation deed.

• The court said cost savings made by the ASX-listed firm had to be taken into account when assessing the earnings impact.

• “Cosette failed on both grounds. The trial judge found that aspects of MPG’s Q3 FY25 sales performance did constitute an adverse change, but did not qualify as a material adverse change within the meaning of the SID (scheme implementation deed),” the court said.

• The court also rejected Cosette’s claim that Mayne had misled it regarding its expected 2025 earnings performance.

• The court also ordered Cosette to pay the legal costs of the appeal.

• The A$672 million ($469.7 million) takeover has faced political opposition, with South Australian Premier Peter Malinauskas criticising the transaction. Federal Treasurer Jim Chalmers blocked the deal in November last year on national interest grounds.

• Mayne Pharma entered a trading halt earlier on Wednesday pending the decision.($1 = 1.4308 Australian dollars)

(Reporting by Rajasik Mukherjee in Bengaluru; Editing by Subhranshu Sahu)

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