CINCINNATI: Hailed little more than a month ago as a marriage made in heaven, the proposed $1.3 billion (€1.01bn; £682.7m) merger between coupon redemption specialist Valassis Communications and market-leading direct mail firm Advo [WAMN: 10-Jul-06] has been called off amid mutual recriminations of 'fraud' and 'smokescreens'.
In a statement filed Wednesday in Delaware Chancery Court, Valassis accuses Advo of intentionally providing "materially false financial information" and withholding information at a time when its operating income was "materially off forecast."
In its counter-statement Advo 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."
Claims Valassis chairman/ceo Alan F Schultz: "Advo left us with no choice. The pertinent information we received was erroneous, projections were grossly inaccurate and we believe we were the victims of fraud."
Ripostes an Advo spokeswoman: "Advo remains committed to the transaction contemplated by the binding merger agreement and will take action to enforce that agreement and vigorously defend itself against Valassis' claims."
In the event that the court upholds Advo's case and the merger goes ahead, the marriage is likely to make Who's Afraid of Virginia Woolf seem like Love Story.
Data sourced from AdAge (USA); additional content by WARC staff