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G8 Education agrees to settle class action lawsuit
Jason Roberts
Mar 25, 2024
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G8 Education has reached a binding agreement to settle the class action commenced against it by Slater & Gordon, on behalf of shareholders, in November 2020 in the Supreme Court of Victoria.
The settlement will see current and former shareholders receive between them around $46.5 million in compensatory funds, although the net cash impact to G8 will be substantially lower, around $24.5 million, as insurance and tax are applied.“The settlement is without admission of liability, with G8's board determining that a commercial settlement is in the best interests of G8 and its shareholders,” G8 noted in the statement.
From a financial perspective there will be no impact to G8’s 2024 results as balance sheet provisions to cover adverse regulatory, legal and other outcomes amounting to $55 million plus indemnity insurance proceeds, more than cover the settlement obligations.
Settlement marks end of more than three year claim process
The agreement reached between G8 and Slater & Gordon marks the end of an extended process that began in late 2020.
Slater & Gordon brought the claim on behalf of shareholders in the wake of two separate substantial share price falls, one in December 2017 and the other in February 2018, that were precipitated by two separate announcements, a trading update and Full Year 2017 results respectively, that were released prior to the falls occurring.
The class action was opened to any investor who acquired G8 shares between 23 May 2017 and 23 February 2018, and subsequently suffered a loss at these events, were eligible to participate with Slater & Gordon alleging that G8 failed to disclose material information that was relevant to its 2017 financial performance in a more timely fashion as is expected via its continuous disclosure obligations.
The settlement still needs to be approved by the Court before the matter is closed but the trial date, scheduled for 15 April 2024, will now be cancelled.
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