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Slater and Gordon has announced a conditional agreement to settle a shareholder class action against Billabong International Limited.
Following mediation, the parties agreed on 11 July 2016 to a conditional settlement under which Billabong will pay a total of $45 million to class action group members (inclusive of legal costs).
Billabong will not admit liability under the terms of the settlement which will be put before the Federal Court for approval in coming months.
Registrations to participate in this class action closed on 16 November 2015.
Slater and Gordon will be contacting registered group members to provide them with details of the settlement, the process for obtaining client and court approval and the next steps towards distribution.
The allegations in the class action relate to an announcement by Billabong to the market on 19 August 2011 that, contrary to prior earnings guidance given on 18 February 2011, it no longer expected to return to Earnings Per Share (EPS) growth rates in excess of 10 per cent per annum in the second half of the 2011 financial year (2H11) and the financial year ending 30 June 2012 (FY12); and an announcement on 19 December 2011 that, contrary to prior earnings guidance, it no longer expected strong underlying growth in earnings before interest, tax, depreciation and amortisation (EBITDA) for FY12 but, rather, expected its EBITDA performance for the first half of FY12 (1H12) to be 20-26% below its 1H11 performance.
In response to the announcement on 19 August 2011, Billabong’s share price fell from $5.15 immediately prior to the disclosure to $3.46 on 22 August, a fall of about 33 per cent. In response to the announcement on 19 December 2011, Billabong’s share price fell from $3.64 immediately prior to the disclosure to $1.77 on 20 December 2011, a fall of about 51 per cent.
The class action alleged that during the period of 18 February 2011 to immediately prior to the publication of a trading update on 19 December 2011, Billabong engaged in misleading and deceptive conduct and failed to abide by its continuous disclosure obligations and the ASX Listing Rules, by providing guidance for FY11 and FY12 without a reasonable basis and by failing to inform the market about information which had a material impact on the value of Billabong securities.