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Tesco to pay US$12mln to settle US lawsuit

Published: 08:54 26 Nov 2015 GMT

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The deal will settle one of two claims against Tesco before US courts

Tesco (LON:TSCO) is to pay US$12mln to settle a US lawsuit linked to over-statement of commercial income last year.

The supermarket group, which shocked markets by uncovering a black hole in its accounts in September last year, agreed the deal with holders of its American depositary receipts (ADRs).

They launched a class action lawsuit against the company, alleging breaches of certain US federal securities laws.

The agreement, subject to confirmation by a federal court in New York, provides for Tesco to pay the cash to settle the class action with no admission of liability.

Tesco said: "This agreement, if confirmed, will settle one of two claims before US courts arising out of the commercial income overstatement.

"The other claim is brought in Ohio by the remaining holders of ADRs equivalent to less than 0.2% of the total issued ordinary shares of the company."

New chief executive Dave Lewis is trying to put Tesco back on track after a string of profit warnings and the departure of Lewis's predecessor Philip Clarke.

Shares in Tesco rose 1.3p to 169.8p in early trading in London.

Shore Capital said the settlement was "small beer in the big scheme of things" but was another example of how Tesco's new management team was having to tidy up previous problems.

The broker's analyst Clive Black said: "Whilst the devil is in the detail, we deem this development to be another notch of good news, allowing senior management to focus that little bit more on the more important day job of turning this once-great business around."

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