The world's fourth-biggest food retail and foodservice group by sales, Ahold said on Monday it would compensate shareholders who purchased stock between July 30, 1999 and Feb. 23, 2003, just before the scandal broke, to settle the class-action suit.

"We think this is a fair amount. It is a substantial compensation for shareholders of between $1 and $1.30 per share," he said. "This is not so high that it will bring Ahold into problems."

Analysts were also generally upbeat on the deal, although they said that what the firm would do now strategically was a big concern to investors.

"We believe this is very positive for Ahold and its shareholders. The damage is not too big and can easily be paid out of Ahold's cash pile," said Van Landshot's Jan Wirken.

Ahold said it will take a provision of $1.05 billion in the third quarter, resulting in a charge of $685 million after tax, as a result of the settlement. It will receive $117 million from insurance.

The firm is due to release third-quarter results Tuesday, and analysts had forecast net income to fall by 12 percent from the previous quarter, before news of the settlement charge, in the face of tough pricing from competitors and disappointing sales growth. Many expect Ahold to abandon current margin targets.

Looking at compensation faced by other firms blighted by accounting scandals such as Worldcom and Enron, Wakkie noted the costs could have been higher.

Ahold shares are down from a 52-week high of $8.72 hit in August and trade at around 18 times estimated 2006 earnings versus around 20 times for U.S. companies Wal-Mart Stores Inc. and 22 times for Sysco Corp.

"From the moment this came out in February 2003 this has been a dark cloud hanging over Ahold," said Peter Paul de Vries of the VEB shareholders lobby organization which helped broker the deal and will also receive $2.95 million from Ahold.

Several former top executives of Ahold are still due to face criminal charges linked to the bookkeeping scandal. They will go on trial in March on fraud charges.

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