8/5/2026
Mayne Pharma Investors Push for Break-Up After Blocked Takeover Bid
Australian Financial Review (08/05/26) Smith, Michael
Mayne Pharma (ASX: MYX) investors are calling for the sale of its women’s health and dermatology businesses in the United States, after the federal government’s decision to block a takeover of the Adelaide-based company last year left them nursing heavy losses. Key shareholders, including offshore hedge funds and investors who now make up more than 20% of Mayne’s share register, are putting pressure on chairman Bruce Robinson to start a strategic review of the group’s assets. This follows Treasurer Jim Chalmers’ shock move last year to block a $672 million takeover bid for Mayne by U.S. private-equity backed Cosette on national interest grounds. Cosette had spent months in court trying to back out of the $7.40 per share offer, arguing that there had been a material adverse change in Mayne’s financial position. Mayne shares now trade at less than half that amount, and investor frustration came to a head late last week when the company posted bleak fourth-quarter earnings. “The company looks very undervalued when you consider that it is capped at just over $200 million, and it has $50 million in net cash plus property and a plant in Adelaide worth $60-$70 million,” said Anton Tagliaferro, a veteran funds manager, who holds the stock. He runs a small-cap fund called Fundamental Investment Management. “This essentially means that the company’s U.S. women’s health and dermatology businesses, which have combined net sales of over $300 million, are being effectively valued at around $100 million which is very low.” Although there is no formal push to force the board’s hand, which would be possible if investors who hold at least 5% of the shares requisition an extraordinary general meeting, key shareholders are not ruling out drastic action, such as a board spill in the future. “There is significant dissatisfaction among the shareholder base,” said Brett Wells, whose family owns about 2% of the stock. He said a challenge was inevitable “without a substantive pivot by the board, and retirement of the chair.” Investors were frustrated at the $800 million in cumulative net operating losses over the past four years and the management’s handling of the failed Cosette takeover, Wells said. Mayne’s chief executive, Shawn O’Brien, stepped down in February and was replaced by its finance chief, Aaron Gray. “Mayne Pharma is not viable as an ongoing entity as it does not have sufficient scale,” Wells said. “The initial goal should be disposal of the branded drugs to an acquirer – it's timely as it's currently a hot area in the United States.” Shareholders want the board to sell Mayne's Adelaide manufacturing plant, which employs 200 people and was at the center of Chalmers' decision to block the takeover bid. Cosette, which wanted a way out of the deal, had threatened to close the plant if its bid was successful. That asset sale would clear the way for the sale of Mayne's U.S. women's health franchise and dermatology business, which account for the bulk of the company's earnings, said the shareholders. “We believe there would be many U.S. companies who would pay a very good price for Mayne's U.S. operations as we believe they would be a very valuable addition to an existing operation there,” Tagliaferro said. Pressure on the management has increased after Mayne Pharma posted a 6% fall in fiscal 2026 revenues and a 33% drop in underlying pre-tax earnings last week. However, the company’s shares have risen 20% since Friday when investor Jeremy Raper posted a note calling for it to be broken up. “85% of (Mayne’s) revenue is earned in the United States – $U.S.212 million ($301 million) of U.S. sales against $384 million of group revenue inside a sleepy, Australian-listed, Adelaide-domiciled corporate entity,” Raper wrote. “I should underline this key structural reason for the break-up: an ASX-listed small-cap whose core businesses are American women’s health and dermatology will never be appropriately valued in this market as currently structured.” Raper and other hedge fund investors said activist funds could force change at some point if the management did not act. Mayne Pharma declined to comment. Mayne’s shares were trading at $3.10 on Wednesday. Investors hope to get $5 to $7 per share in the event of a break-up and asset sales. Another shareholder, Hong Kong-based Maso Capital, which has a track record of securing change in Australian companies including Ramsay Health Care, also wants to see a strategic pivot. Other investors include London’s Trium Capital, San Francisco’s Funicular Funds and New York’s Rubric Capital Management. In Australia, Star Entertainment Group (ASX: SGR) chief executive Bruce Mathieson Jr. is a key shareholder. MST Marquee analyst Andrew Goodsall said Mayne Pharma's revenue decline last year partly reflected the upheaval caused by the failed Cosette bid, and softness in the dermatology business was being offset by positive momentum in the women's health business. Several investors believe Mayne's low valuation means it's ripe for a takeover, but are also wary that offshore bidders could be put off by the risk of the government intervening again to protect the Adelaide plant.
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