The a2 Milk (ASX:A2M) has agreed to a $62 million settlement to resolve a long-standing class action lawsuit involving allegations of continuous disclosure failures.
The settlement, which includes interest and legal costs, addresses claims that the dairy giant misled investors regarding its fiscal year 2021 performance outlook.
The legal proceedings originated in late 2021, when law firms Shine Lawyers and Slater and Gordon filed separate class actions in the Supreme Court of Victoria. These were later consolidated in 2022.
The representative proceedings were brought on behalf of shareholders who acquired stock on the ASX or NZX between Aug. 19, 2020, and May 9, 2021—a period marked by several earnings downgrades that saw the company’s market value contract sharply.
Despite the substantial payout, a2 Milk maintained a firm stance on its conduct, stating the agreement involves no admission of liability.
Executives clarified that the settlement was a commercial decision aimed at avoiding the ongoing distractions and escalating costs of a protracted trial.
The company confirmed the $62 million will be fully funded by insurance proceeds, ensuring the settlement has no adverse impact on its FY26 earnings or financial projections.
The agreement remains subject to the finalisation of a settlement deed and formal approval from the Supreme Court of Victoria.
At the time of reporting, a2 Milk’s share price was $9.40.