SLATER & GORDON CLASS ACTION

If you purchased Slater & Gordon Limited (SGH) shares between 1 April and 16 December 2015 inclusive, you may be eligible to join our potential class action.

ACA Lawyers is investigating the circumstances in which SGH acquired the Professional Services Division of Quindell plc, which was funded through a redeemable rights issue and debt. We are also investigating statements subsequently made to the market by SGH regarding its revenue and profit guidance, which were later withdrawn. The SGH share price has fallen over 85% since April 2015, wiping off over $2 billion in shareholder equity.

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For further information about the Slater & Gordon class action and the funding provided by Woodsford Litigating Funding and JustKapital Litigation Funding, please call us on +61 2 9216 9898 or email your enquiries to info@acalawyers.com.au


BACKGROUND

ACA Lawyers are investigating Slater & Gordon Limited’s (SGH) market announcements in the period 1 April 2015 to 16 December 2015, inclusive.

On 30 March 2015 SGH launched an entitlement offer to shareholders to acquire two new shares for every three already held at a price of $6.37. The offer raised gross proceeds of approximately $890 million to partially fund the purchase of Quindell’s Professional Services Division in the United Kingdom. In the market announcement at that time, SGH said the Quindell acquisition would increase earnings per share by more than 30 percent in the first year.

On 28 August SGH provided 2016 earnings guidance to the market that:

  1. total group fees would be in excess of $1,150 million;
  2. group earnings before interest, tax, depreciation, amortisation and movement in WIP (EBITDAW) would be in excess of $205 million; and
  3. operating cash flow would be in excess of EBITDAW.

SGH reiterated its 2016 earnings guidance in the Group Managing Director’s address to the company’s AGM on 20 November 2015. This was despite expecting cash flow to be negative $30-40 million in the first half. SGH again reiterated its 2016 earnings guidance in further market announcements on both 26 and 30 November 2015. On 17 December 2015, SGH withdrew their guidance and the SGH share price fell 14 percent.

From the time the entitlement offer closed to the withdrawal of guidance on 17 December 2015 the SGH share price fell more than 86.4 percent and wiped almost $2 billion off shareholder value.

The investigation is examining whether shareholders who acquired shares in SGH as a result of the rights issue in April 2015 or in reliance on statements made by the company prior to 17 December 2015 and who have suffered a loss have a viable action against the company.

Woodsford Litigating Funding and JustKapital Litigation Funding are providing funding for the investigation. The funders will fund a class action against SGH should the investigation conclude SGH has breached its continuous disclosure obligations and the Australian Consumer Law, and there is sufficient support from qualifying past and present shareholders.