Treasury Wine Estates has agreed to pay $65 million to settle a class action alleging it breached its continuous disclosure obligations with misleading earnings guidance in 2018 and 2019.

The company eventually downgraded its guidance on January 28, 2020, causing its share price to plunge from $17 to under $13.

A seven-week trial had been due to begin on Monday in Victoria’s Supreme Court but the settlement was reached instead.

“The outcome means that group members who sustained losses as a result of Treasury’s allegedly contravening conduct, will receive compensation in the short term,” Slater and Gordon lead lawyer Mitchell Coidan said.

Law firm Maurice Blackburn had also brought a claim on behalf of investors, which was consolidated into a joint action.

TWE, the makers of Penfolds, Wolf Blass and Pepperjack, said it was making no admission of liability in settling the claim.

“The settlement was a commercial decision made in the best interests of shareholders to enable TWE to remain focused on executing against its strategy,” the company said in a statement.

-AAP