Legal Dispute Clouds Mayne Pharma’s Acquisition as Shareholders Prepare to Vote

Background to the Dispute

Mayne Pharma Group Limited (ASX, MYX), a specialty pharmaceutical company, finds itself at the centre of a legal and strategic standoff with Cosette Pharmaceuticals, Inc. The dispute revolves around Cosette’s recent attempt to terminate the Scheme Implementation Deed (SID) signed in February 2025, which underpins Cosette’s proposed acquisition of Mayne Pharma.

Cosette’s termination notice, issued in early June, claims a "Material Adverse Change" in Mayne Pharma’s business performance, citing factors such as recent earnings updates, ongoing litigation, and regulatory correspondence. Mayne Pharma strongly contests this claim, arguing no such material adverse change has occurred and that Cosette’s termination is invalid.

Legal Proceedings and Court Schedule

In response to Cosette’s termination notice, Mayne Pharma has initiated court proceedings to determine the validity of the termination. The Supreme Court of New South Wales has postponed the second court hearing originally scheduled for June 20 to September 18, 2025. This delay means the final legal resolution will come after the planned shareholder meeting.

Despite the ongoing litigation, Mayne Pharma intends to proceed with the Scheme Meeting on June 18, where shareholders will vote on the proposed acquisition. The outcome of this vote, combined with the court’s eventual ruling, will determine whether the scheme can move forward.

Directors’ Recommendations and Shareholder Guidance

The board of Mayne Pharma remains united in its recommendation that shareholders vote in favour of the scheme, provided no superior proposal emerges and the independent expert continues to endorse the deal as being in shareholders’ best interests. Notably, Mayne Pharma’s Managing Director and CEO, Shawn Patrick O’Brien, who holds significant performance rights and shares, supports the scheme and stands to receive a retention bonus contingent on the transaction’s completion.

Shareholders are urged to carefully review both the original Scheme Booklet and the newly issued Supplementary Scheme Booklet, which provides updated information on the dispute and the acquisition process. Voting can be done in person or via proxy, and Mayne Pharma has established a shareholder information line to assist with queries.

Regulatory and Transactional Uncertainties

Adding to the complexity, Foreign Investment Review Board (FIRB) approval remains outstanding. Mayne Pharma is actively working with Cosette to secure this regulatory clearance before the Scheme Meeting. The absence of FIRB approval injects an additional layer of uncertainty into the transaction timeline.

The legal battle and regulatory hurdles underscore the risks inherent in this acquisition, but Mayne Pharma’s leadership appears committed to navigating these challenges to deliver value to shareholders.

Looking Ahead

The coming months will be pivotal for Mayne Pharma shareholders. The June 18 Scheme Meeting will test shareholder appetite for the deal amid ongoing legal uncertainty, while the September court hearing will ultimately decide the fate of the acquisition agreement. Investors and analysts alike will be watching closely for any signs of resolution or further escalation.