Valassis Sues over buyers remorse

The funny (or whatever adjective appropriate) thing is that this isn't even a novel strategy: suing to stop a merger you yourself started. Tyson tried it a few years ago during the Tyson/IBP merger, and lost.

Must be sort of a strange, awkward meeting.
“We don't want to merge with you anymore.”
“ Yes, you must, I already ordered a special cake and issued the invitations.”
“No, in fact, if you don't let us walk away, we'll sue! For, for, for....fraud!”
“Bring it on, biatch!”

Advertising Age - Valassis Sues to Stop $1.3 Billion Takeover

Valassis is launching its second major lawsuit of the year, after earlier suing rival News Corp.'s NewsAmerica Marketing, alleging antitrust violations.
...
Valassis Communications today sued to end its proposed $1.3 billion takeover of Advo, accusing the nation's largest direct-mail media company of fraud.

Valassis said in a statement that its complaint, filed today in Delaware Chancery Court, accuses Advo of intentionally providing “materially false financial information” and withholding information at a time when its operating income was “materially off forecast.”

Advo in a statement dismissed the lawsuit as “baseless and without merit” and said it “can only surmise that Valassis' action is merely a smokescreen to hide the fact that Valassis is suffering from an extreme case of buyer's remorse.”

Valassis announced the lawsuit after markets closed on Wednesday, but its stock plunged nearly 16% when the merger was announced July 6 and has recovered only about a third of that loss since.

The complaint was filed under seal, a Valassis spokesman said, but the company's statement said it also alleges that Advo executives knew of, but did not disclose, “significant internal control deficiencies associated with Advo's enterprise-wide order-to-cash system.”

“Advo left us with no choice,” said Valassis Chairman-CEO Alan F. Schultz in the statement. “The pertinent information we received was erroneous, projections were grossly inaccurate and we believe we were the victims of fraud.”

Yeah, whatever. Like herpes discovered during the wedding ceremony in some pre-nuptial quickie in a back room. Not that I have any experience with that.

Tags: Advertising, /Business