Advo Inc. will begin mailing ballots to its shareholders, asking them to approve a takeover by Valassis Communications Inc., the company announced on Tuesday. Last week, Valassis filed a lawsuit claiming that Advo management had misrepresented the company’s financial position and seeking to break its acquisition agreement (Direct Newsline, Sept. 1, 2006).
The material Advo will send out ask that stockholders approve a merger agreement Valassis had previously agreed to. Under the terms of that agreement, all shares of Advo stock would be sold to Valassis for $37 per share. The actual vote will take place on Sept. 13, at a special meeting of stockholders.
At the end of trading on Tuesday, Advo shares had edged up to $31.16 apiece, after they had dropped from just under $37 last Thursday.
Advo characterized Valassis’ lawsuit as “an extreme case of buyers remorse arising from the negative reaction by Valassis’ stockholders and analysts to the announcement of the transaction.” Since the deal was first announced, Valassis’ stock price has fallen by nearly half, and closed on Tuesday at $18.50.
Valassis did not immediately offer a comment on Advo’s announcement that it was mailing the proxy materials.
Network
