Australian drugmaker Mayne has announced plans to split its business into two separate companies in a bid to improve shareholder value.
This demerger will see the Melbourne-based firm seek separate listings on the Australian Stock Exchange of its global injectable pharmaceutical business (Mayne Pharma) and its domestic healthcare operations (Mayne Diagnostic Services, Mayne Pharmacy and Mayne Consumer Products).
Chairman Peter Willcox said listing the two entities “will meet their strategic and capital requirements without unduly disturbing their operations” and interested parties “will have the ability to invest directly in either or both companies based on the investment characteristics that best meet their objectives.”
Explaining the difference of the two businesses, chief executive Stuart James noted that Mayne Pharma is “growth oriented” and will reinvest a significant portion of its cash flow into R&D, while the domestic businesses may appeal more to investors who are looking for strong cash flow and dividends.
Mr Willcox ended by reiterating that “it is not our intention to sell any of Mayne’s businesses. Our focus is on ensuring the demerger process is rigorous and efficient,” but that has not ended speculation about a takeover bid or private sale.
The Australian Financial Review reported that up to three privately-backed equity groups have sought the help of competitor Australian Pharmaceutical Industries to join with them in derailing the demerger. However Mayne remains confident that the deal will be completed by the end of the year.