Mayne Pharma Surges on Takeover Panel Ruling: Buy for the 24% Upside or Too Risky?

Mayne Pharma (ASX: MYX) jumped 24% to $5.96 after the Takeovers Panel gave a ruling that may save its $672 million takeover by Cosette Pharmaceuticals. The Panel told Cosette to provide legal guarantees to protect Mayne’s Salisbury plant in Adelaide, solving a major issue that had put the deal at risk. For investors, the numbers are clear: Cosette is offering $7.40 per share, which means a possible 24% profit if the takeover succeeds. The tough part is deciding if that gain is worth the real chance, as the deal could still fall apart before the important November 24 deadline.

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Takeovers Panel Ruling Strengthens Mayne’s Hand

The Takeovers Panel’s ruling gives Mayne Pharma more strength in its takeover battle. The decision focuses on Mayne’s Salisbury plant in Adelaide, which has over 200 workers and makes important medicines. Cosette had been unwilling to promise it would keep the plant running, raising fears of job losses if the takeover went ahead. The Panel has now ordered Cosette to give clear legal guarantees to protect the facility, forcing the buyer to agree on an issue Mayne has been pushing for months.
This matters because it removes one of the big roadblocks that let Cosette delay the deal. For months, Cosette has looked less willing to go forward, pointing to problems and trying to change or escape the agreement. By demanding legal commitments for the Salisbury plant, the Panel makes it harder for Cosette to back out on this point, though other challenges still exist. For Mayne, these protections help secure jobs and keep operations stable, making the takeover easier for shareholders and regulators to accept. The big question now is whether Cosette will truly keep these promises or look for another way out.

Critical Dates and Deal Risks: November 24 Looms Large

The opportunity looks straightforward: buy at $5.96, collect $7.40 if the deal closes, and pocket a 24% return in weeks. However, several material risks could cause this deal to fall apart:

– Key risks investors should watch:

• Tight timeline: The scheme implementation agreement ends November 24, and Cosette’s financing expires the same day
• Active appeal: Cosette has already filed an appeal against the Takeovers Panel’s ruling, signalling continued resistance
• FIRB uncertainty: Foreign Investment Review Board approval remains pending, with just days until the deadline
• Second Court Hearing: Scheduled for November 21, only three days before all agreements expire
• Reluctant buyer: Cosette has demonstrated for months that it wants out, raising multiple objections since the original agreement

What makes this particularly precarious is the combination of a compressed timeline and a buyer actively looking for exits. Cosette hasn’t just dragged its feet; it’s tried multiple times to terminate the deal, only to be blocked by courts. This isn’t the behaviour of a committed acquirer eager to close.

The Investor’s Takeaway

For investors willing to take risks, the opportunity is clear: there could be a 24% gain in just a few weeks if everything goes smoothly. The Takeovers Panel ruling removes one obstacle and strengthens Mayne’s position. If FIRB gives approval and Cosette doesn’t find another way to back out, the takeover should close at $7.40 per share.

The downside is just as clear. Cosette is still hesitant, has an appeal in progress, and the financing deal runs out on November 24. If any part fails, whether FIRB blocks it, the appeal works, or the financing ends, the takeover collapses. In that case, Mayne’s share price would likely fall back to $4.50–$5.00, where it was before takeover hopes, meaning a 15–20% loss from current levels.

This represents a classic merger arbitrage opportunity with compressed timelines and binary outcomes. For aggressive traders comfortable with deal risk, buying at $5.96 offers meaningful upside with a defined risk profile. For conservative investors prioritising capital preservation, the multiple failure points and tight deadlines suggest waiting for clarity rather than speculating on completion. The next 72 hours should reveal whether this deal finally closes or joins the long list of Australian takeover attempts that never made it across the finish line.