Spotless Group is facing a second class action over financial guidance it provided in 2015 that caused a massive plunge in its share price.
Law firm Slater & Gordon on Thursday filed proceedings in the Federal Court alleging Spotless issued guidance for its 2015/16 financial performance that misled investors.
Spotless, one of Australia's biggest providers of facilities management services, is already the subject of a class action filed in February by William Roberts Lawyers, which centres on the accuracy of the company's financial results for the 2014/15 financial year, which formed the basis of its forecasts for the following year.
The new legal action comes as the company deals with a $1.26 billion takeover bid by Downer EDI, which Spotless has again urged shareholders to reject as its board believes the offer fails to properly value the company's potential.
Slater & Gordon senior associate Mathew Chuk said Spotless forecast in August 2015 an improvement in its financial performance, and then downgraded its guidance three months later, which triggered a fall in its share price of more than 50 per cent over four days.
Spotless knew well before it made the downgrade that it was unlikely to be able to meet its forecast, Mr Chuk said.
"This class action alleges that Spotless should never have set market expectations so high in such circumstances," he said.
In a statement issued late on Thursday, Spotless denied the allegations and said it would vigorously defend the proceeding.
Downer has extended its offer to Spotless shareholders until mid-June, but Spotless chairman Garry Hounsell said on Thursday the board believes shareholders can do better over the medium term by retaining control of the company.
"We have a clear strategy to deliver earnings growth and we are executing on it," Mr Hounsell said in a statement.
Spotless has a growing pipeline of contacts and it is turning around its loss-making commercial laundries business, he said.
Its shares closed steady at $1.12, while Downer shares gained six cents to $6.47.
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