Advo Counter Suit Seeks Immediate Merger
Advo has filed a counter suit against Valassis in an effort to force Valassis to complete its $1.3 billion purchase of Advo by the end of this week.
FSI giant Valassis is trying to rescind the deal: It filed suit against direct-mail firm Advo on Aug. 30, saying Advo lied about its financial status and about management problems during acquisition negotiations (PROMO Xtra, Sept. 1, 2006).
Advo’s counter suit, filed last week in the Court of Chancery for New Castle County in Delaware, is asking the court to force Valassis to complete the terms of its merger agreement by Sept. 15. Advo will hold a special stockholders meeting on Sept. 13 to win approval of the sale.
The suit also asks the court to force Valassis to pay interest to Advo stockholders beginning on Sept. 15. Valassis agreed on July 5 to buy Advo for $37 a share.
Valassis says that Advo’s sealed counter suit contains no new information. Valassis plans to pursue its own suit: “When the facts are reviewed in a court of law we fully expect the merger agreement to be rescinded,” Valassis said in a statement. The company plans to press for damages, too.
