Advo Files Countersuit Against Valassis
Advo Inc. has filed an answer and counterclaims in response to a complaint filed last month by Valassis Communications Inc.
On Aug. 30, Valassis commenced litigation in the Delaware Chancery Court seeking to rescind the merger agreement with Windsor, CT-based Advo based on allegations of fraud and material adverse changes.
Livonia, MI-based Valassis alleges that Advo's management materially misrepresented the financial health of the company and failed to reveal internal control deficiencies.
Advo's counterclaims seek, among other things:
--A court declaration that Valassis has no right to rescind or terminate or otherwise evade its obligations under the July 5 binding definitive merger agreement;
--A decree of specific performance requiring Valassis to consummate its acquisition of Advo at $37 per share; and
--An order requiring Valassis to pay interest from Sept. 15, on the $37 per share merger consideration due to Advo stockholders.
Advo said that assuming its stockholder approval of the merger agreement at the stockholders meeting on Sept. 13, all of the conditions to closing the merger will be satisfied as of that date, and the terms of the merger agreement require Valassis to consummate the merger within two business days thereafter, or by Sept. 15.
Advo expects that the answer and counterclaims, in a somewhat redacted format to protect non-public, will be available shortly and be posted to Advo's Web site.