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Treatt (TET)

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Up 454.00p
Change Today:
12.00p
Market Cap:
267.93m

Treatt receives 'disappointing' result in Earthoil legal battle

19 Jul 16

LONDON (ShareCast) - (ShareCast News) - Flavour, fragrance and cosmetic ingredients business Treatt revealed what it called a "disappointing" result of an ongoing legal battle on Tuesday, over its purchase of subsidiary Earthoil.
It was first announced on 6 December 2012 that the sellers of Earthoil Group, which was acquired by Treatt in April 2008, had filed a claim against the company in the Chancery Division of the High Court.

The claim relates to various matters in respect of the earn-out - the deferred consideration payable to the sellers in respect of the acquisition.

Following rulings by the High Court and the Court of Appeal on issues of contractual interpretation, it was announced on 11 February 2015 that the matter was being referred to Expert Determination for resolution of the substantive claim, being the amount of the earn-out.

"That Expert Determination process has now concluded and the value of the earn-out has been put at 970,648," said Treatt in a statement.

"Whilst we are pleased that the expert has awarded significantly less than the sellers claimed, having taken legal and professional advice throughout, including counsel's opinion, the board is extremely disappointed with this outcome.

"The Earn-out is subject to deductions of 250,000 in respect of a cash advance made on completion of the purchase in April 2008 and 318,000 in respect of a settled claim under the warranties provided by the Sellers in April 2008," Treatt said.

It was also determined that a contribution of 11,370 be made towards the sellers' fees for the Expert Determination process, which are to be split 45:55 in their favour, leaving a balancing payment of 414,378 due, which Treatt said will be made to the sellers in due course.

"Whilst this resolves the majority of the claim issued by the sellers, there remain some outstanding issues, which are to be determined by the court," Treatt said.

"The sellers' outstanding claims, the value of which is 693,888, relate to alleged breaches of contract, which are strenuously denied.

Treatt said as a result, final resolution of the matter and judgement in respect of the costs of the litigation is unlikely to be before 2017.

"This outcome is extremely disappointing," said Treatt CEO Daemmon Reeve on the outcome.

"We have received consistent legal advice throughout this process in respect of our position.

"Nonetheless, this issue has been hanging over the company for some years and this is a significant step to putting this matter behind us and moving on," Reeve added.

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Market Data

Currency UK Pounds
Price 454.00p
Change Today 12.00p
52 Week High 508.00p
52 Week Low 388.00p
Volume 11,254
Shares Issued 59.01m
Market Cap 267.93m

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