Mayne Pharma board accepts takeover offer

MAYNE Pharma shares surged 34 per cent today after the cancer drugs manufacturer recommended that shareholders accept a $2.63 billion takeover bid from United States-based specialty pharmaceuticals firm Hospira Inc.

MAYNE Pharma shares surged 34 per cent today after the cancer drugs manufacturer recommended that shareholders accept a $2.63 billion takeover bid from United States-based specialty pharmaceuticals firm Hospira Inc.

Hospira, one of the largest manufacturers of hospital products in the US with annual sales of about $US2.6 billion, has offered $4.10 cash for each Mayne Pharma share, equating to a total bid of $2.63 billion.

Mayne Pharma shares rocketed higher when they were released from a trading halt today.
They closed up $1.06, or 34.2 per cent, at $4.16, after peaking at $4.26 on huge turnover of 38.2 million shares.

The $2.63 billion takeover bid from US-based Hospira generic injectables company was one of a number of unsolited offers considered recently, Mayne Pharma chairman Peter Willcox said.

"We (approach) this transaction from a position of strength," Mr Willcox told a media briefing today.

Mayne shares last traded at $3.10 before being placed in a halt on Tuesday, and surged over 35 per cent to $4.26 following the announcement.

The offer price represents a 50 per cent premium to the volume weighted average price of Mayne shares following its 2005 demerger from the former Mayne Group.

The Hospira offer is conditional upon no superior offer being received.

Hospira was looking to boost its presence in Northern Europe, where Mayne has made inroads since relocating to the UK this year, Mr Willcox said.

Hospira chief executive Christopher Begley said the purchase would more than double Hospira's international presence.

"The Mayne Pharma acquisition will ... significantly accelerate the expansion of our generic injectables business," Mr Begley said.

Mr Willcox yesterday defended the $5 million spent by the firm on investigating a listing on the London Stock Exchange, adding that Mayne was undervalued in Australia.

"But it is recognised globally," Mr Willcox added.

Mr Willcox was unable to guarantee the company's Victorian manufacturing plant at Mulgrave would remain open, but said "common sense" would suggest Hospira would retain some Mayne staff.

Scheme documents would be sent to Mayne shareholders in late October, with a vote on the proposal expected to take place in December.

If approved, the transaction would complete before the end of the year, Mr Willcox said.

Mayne chief executive Thierry Soursac, who joined the company following its relocation to London in November, was not in Australia yesterday.

Mr Thierry presented the firm's annual results earlier this month, reporting a $31.34 million net loss.

It was unclear today if Mr Thierry would continue to have a role in the company, with executive positions not part of the deal.

Mr Thierry's pay from just 11 months in the job was revealed yesterday to have been over $5 million.

However the company at the time boasted a pipeline bursting with yet-to-be released oncology drugs.

Mayne Pharma's market cap on first day's trading following the 2005 demerger was $1.6 billion.