Australia’s Treasury Wine pays $39 million to settle shareholder class action
(Reuters) — Australian winemaker Treasury Wine Estates Ltd. said on Monday it will pay AU$49 million ($39 million) to settle a class action lawsuit over allegations it misled shareholders about problems at its U.S. business.
Law firm Maurice Blackburn filed the suit in 2014 after the world's biggest listed stand-alone winemaker announced a surprise A$190 million writedown at its U.S. unit, partly to cover the cost of pouring out millions of bottles of unsold wine.
The writedown prompted a sharp decline in Treasury Wine's shares, and the company subsequently fought off two takeover attempts by private equity firms.
The company has since restructured its U.S. business. On Monday, its shares rose 0.9% to a record high of A$14.10, nearly three times the per-share value of the private equity takeover approaches. The broader market was down 0.7%.
Treasury Wine, which initially said it would defend the lawsuit, said on Monday the settlement was fully insured and would not have an impact on its financial results.
Litigation financier Bentham IMF Ltd., which funded the class action suit, said the settlement terms were confidential and that the agreement is subject to approval by the Federal Court of Australia.
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