ASX-listed mid-cap Mayne Pharma (ASX: MYX) looks destined to exit the main board after Private equity-backed US pharmaceutical giant Cosette $672 million cash takeover bid for the drug maker of birth control and menopause treatments.
The market clearly liked today’s news with Mayne’s share price up 33% in early afternoon trading.
The company took little time to recommend shareholders accept the $7.40 a share bid, which is a 37% premium to the company’s closing share price yesterday.
Mayne chairman Frank Condella told investors that New Jersey-based Cosette had recognised significant value in the company’s women’s health and dermatology businesses, with the offer giving shareholders the opportunity to receive cash value at a significant premium.
“The deal is in line with the board’s priority to deliver value to our shareholders, and also to provide significant benefits to broader stakeholders,” Condella said.
Added weight to the board’s recommendation, both Viburnum Funds and Bruce Mathieson - the company’s two largest shareholders with a combined 14% stake – have already given the deal the nod.
It’s also understood that Rubric Capital, which owns all of the convertible notes that Mayne Pharma issued late in 2022, has agreed to offload its holdings to Cosette.
Cosette has corporate and manufacturing facilities in New Jersey and North Carolina and is backed by U.S.-based private equity firm Avista Healthcare Partners and private market investment management firm Hamilton Lane.
Cosette Pharma CEO Apurva Saraf said the acquisition marked a transformational step for the company, adding patented, high-growth products to solidify its leadership in women’s health in the U.S. while expanding its reach globally.
“By combining Cosette’s strong portfolio with Mayne Pharma’s proven commercial expertise, the combined company will be well-positioned to further invest in innovation, portfolio expansion and better serve our patients,” he said.
Mayne Pharma has a market cap of $585 million; the share price is up 35% in one year and up 45% year to date.
The company appears to be in a medium-term rally confirmed by multiple indicators. Most importantly, the 5-day moving average is above both the 20 and 50-day moving averages.
Consensus is Strong Buy.
Earlier this month the company’s shares jumped 21% after the drugmaker guided to a major earnings lift.
Due to growth across the women’s portfolio and margin improvement, the ASX midcap now expects underlying earnings for 1H FY25 of $30 million - $32 million to be up between 275% - 300% on the previous period last year.
This article does not constitute financial product advice. You should consider independent advice before making financial decisions.
