By Renju Jose and Christine Chen
SYDNEY (Reuters) -Australia on Friday blocked a A$672 million ($435 million) buyout offer for Mayne Pharma from Cosette Pharmaceuticals after the U.S. drugmaker became a reluctant suitor and threatened to close a local plant.
The decision sent shares in Mayne tumbling 23% before they were put on a temporary trading halt.
Treasurer Jim Chalmers said his decision was entirely consistent with advice from the Foreign Investment Review Board that the proposal would be contrary to Australia’s national interest.
“This is about doing what is necessary to protect Australia’s national interest, the security of our critical medical supply chains, local jobs and the local community,” he said in a statement.
Mayne makes both branded and generic drugs, focusing on women’s health, dermatology and infectious diseases.
Representatives for Mayne and Cosette did not immediately respond to Reuters requests for comment.
Cosette bid A$7.40 per share for Mayne in February but later tried to back out, saying a weaker financial performance from Mayne had resulted in a material adverse impact that rendered their agreement void.
Cosette then threatened to close Mayne’s Adelaide manufacturing plant that employs some 200 people if the deal went ahead. It is one of Mayne’s two main factories – the other one is based in Greenville, North Carolina.
In mid-October, an Australian court rejected Cosette’s request to abandon the takeover, which Mayne shareholders supported.
The decision came just days after Australia’s Takeovers Panel revived hopes of a deal by ruling that Cosette must accept any reasonable conditions Chalmers set in relation to the Adelaide plant, sending Mayne’s shares sharply higher.
Mayne’s shares last traded at A$4.45 on Friday. Before Cosette’s bid, the stock had traded at A$5.41.
Chalmers said on Friday he had received advice from the Treasury and the Foreign Investment Review Board that no conditions could be put in place which would adequately mitigate unique risks to the supply of critical medicines.
($1= 1.5521 Australian dollars)
(Reporting by Renju Jose and Christine Chen in Sydney; Editing by Edwina Gibbs)
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