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Valassis Challenges ADVO to Release Full Version of Suit to the Public

Thursday, September 07, 2006

Press release from the issuing company

LIVONIA, Mich., Sept. 6 -- Valassis Communications, Inc. today issued the following statement in response to recent announcements made by ADVO, Inc.: "In a proxy supplement filed yesterday, ADVO acknowledges that it would not give access to personnel and documents requested by Valassis and KPMG, Valassis's accountants, but it does not tell shareholders why Valassis needed that information. This effort to withhold information from shareholders follows the same pattern that Valassis has encountered in its dealings with ADVO. In fact, this request for information was made after ADVO management informed Valassis that it had significantly missed fiscal third-quarter operating income projections as previously forecast to Valassis, and changed its expectations for ADVO's fiscal fourth-quarter results. In addition, ADVO's purported operating income for April and May that was given to Valassis just days before the parties entered into an agreement was materially overstated. Given the rapid decline of ADVO's business just weeks after the merger agreement was signed, we believe our request for access to relevant information was reasonable and ADVO's refusal to provide the requested information raises serious concerns. Continuing this pattern, in a recent statement, ADVO made false, unfounded assertions that Valassis's lawsuit is a 'tactic' to pressure ADVO to lower the price that was agreed to in the merger agreement. The suit is not a negotiation tactic. In light of what we have learned since the signing of the merger agreement, we are committed to rescinding that agreement and we are confident that when the facts are known we will prevail in court. ADVO also claims that Valassis's lawsuit is the result of 'buyer's remorse.' This also is patently untrue. ADVO executives made fraudulent misrepresentations by knowingly providing Valassis with materially false financial information and knowingly withholding from us material information, including significant internal control deficiencies. Under these circumstances, it is our fiduciary responsibility to our shareholders to aggressively prosecute our claims. Even now, ADVO is blocking access to information in an attempt to hide the truth. Valassis requested that ADVO agree to waive the terms of the confidentiality agreement related to the merger, thus allowing shareholders and the public to review all of the grounds for the lawsuit. ADVO turned down this request, forcing us to redact key facts from the public version of the suit - information that is necessary for investors to properly evaluate both sides of this case. If ADVO management has nothing to hide, why would they refuse to provide Valassis and KPMG access to information to which Valassis is legally entitled under the merger agreement? We challenge ADVO to waive the confidentiality agreement and release the complete version of the suit. Let shareholders and the public assess the facts themselves."

 

 

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