*

Australia's Treasurer says deal not in national interest

*

Cosette, a reluctant suitor, wanted to close an Adelaide

plant

*

Mayne's shares slid 23% before being put on temporary

trading

halt

(Recasts and writes through)

By Renju Jose and Christine Chen

SYDNEY, Nov 21 (Reuters) - Australia on Friday blocked a

A$672 million ($435 million) buyout offer for Mayne Pharma ( MAYNF )

from Cosette Pharmaceuticals after the U.S. drugmaker

became a reluctant suitor and threatened to close a local plant.

The decision sent shares in Mayne tumbling 23% before they

were put on a temporary trading halt.

Treasurer Jim Chalmers said his decision was entirely

consistent with advice from the Foreign Investment Review Board

that the proposal would be contrary to Australia's national

interest.

"This is about doing what is necessary to protect

Australia's national interest, the security of our critical

medical supply chains, local jobs and the local community," he

said in a statement.

Mayne makes both branded and generic drugs, focusing on

women's health, dermatology and infectious diseases.

Representatives for Mayne and Cosette did not immediately

respond to Reuters requests for comment.

Cosette bid A$7.40 per share for Mayne in February but later

tried to back out, saying a weaker financial performance from

Mayne had resulted in a material adverse impact that rendered

their agreement void.

Cosette then threatened to close Mayne's Adelaide

manufacturing plant that employs some 200 people if the deal

went ahead. It is one of Mayne's two main factories - the other

one is based in Greenville, North Carolina.

In mid-October, an Australian court rejected Cosette's

request to abandon the takeover, which Mayne shareholders

supported.

The decision came just days after Australia's Takeovers

Panel revived hopes of a deal by ruling that Cosette must accept

any reasonable conditions Chalmers set in relation to the

Adelaide plant, sending Mayne's shares sharply higher.

Mayne's shares last traded at A$4.45 on Friday. Before

Cosette's bid, the stock had traded at A$5.41.

Chalmers said on Friday he had received advice from the

Treasury and the Foreign Investment Review Board that no

conditions could be put in place which would adequately mitigate

unique risks to the supply of critical medicines.

($1= 1.5521 Australian dollars)