The A2 Milk Company has reached an in-principle agreement to settle the years-long shareholder class actions over its allegedly misleading financial forecasts.
The dual-listed dairy company said in a market release that the settlement amount is $62 million, including interest and costs. The full sum will be met by available insurance proceeds and shall not impact FY26 earnings.
The company noted that it did not admit liability in reaching this settlement. The proposal is subject to the finalisation and execution of a deed of settlement and approval by the Supreme Court of Victoria.
Two separate class action proceedings commenced against A2 Milk in October and November 2021. They were on behalf of shareholders who held an interest in fully paid ordinary shares from August 19, 2020, to May 9, 2021 and were related to the company’s disclosures and guidance for FY21.
The class actions, carried out by Slater and Gordon and Shine Lawyers, were consolidated into a single action in 2022.
The claim alleged that A2 Milk made misleading representations and failed to comply with its continuous disclosure obligations as a listed company, in breach of Australian and New Zealand laws.
Slater and Gordon’s head of class actions, Emma Pelka-Caven, said the in-principle settlement was an important step in proceedings.
“If approved, more than 70 per cent of the settlement sum will go to group members,” she said.
Shine Lawyers practice leader Jonathan Wertheim added that the settlement represents a fair outcome and avoids the delay and uncertainty of a lengthy trial.
