(Corrects to remove reference in paragraph 2 to investors
expecting a higher offer. The stock rose above the offer price
because the company said it would still pay its 31-cent
Dec 18 Marketing services provider Harland
Clarke Holdings Corp said it would buy Valassis
Communications Inc, a marketer of coupons and newspaper
inserts, for $1.31 billion.
Valassis shares jumped to $34.30, above the offer price of
$34.04, as the company also said it would still pay a previously
announced 31-cent quarterly dividend ahead of the deal closing.
The company's revenue has shrunk since 2011 as newspaper
circulation falls, while its quarterly profit has missed
analysts' expectations for the last year.
The combined company will have about $3.3 billion in
revenue, the companies said. Valassis reported revenue of $2.16
billion last year.
The deal, agreed at a 20.3 percent premium price over the
stock's Tuesday close, is expected to close in the first quarter
of 2014. Including debt and options, the deal is valued at $1.84
Valassis' board favored Harland's offer after studying a
range of strategic opportunities, Non-executive Chairman Alan
Harland, owned by billionaire Ron Perelman's investment
company MacAndrews & Forbes Holdings Inc, sold its financial
software and services business to Canada-based Davis + Henderson
Corp for $1.2 billion in July.
Harland Clarke, which has more than 15,000 clients, said it
would finance the acquisition with cash on hand and borrowings
and has received committed financing from Credit Suisse, BofA
Merrill Lynch and Citigroup Global Markets Inc.
Valassis, founded in 1970 as a sales agent for printing
companies, exited two underperforming operations - newspaper
polybag advertising and sampling - last year and restructured
its sales and marketing operations.
The company won $300 million in damages in a 2009 lawsuit
against a News Corp subsidiary, News America Marketing,
claiming unfair competition and "tortious interference." News
Corp settled another lawsuit with the company for $500 million
in 2010. (link.reuters.com/myn55v)
Harland Clarke, which also prints bank checks and makes
cards, was advised by BofA Merrill Lynch, while Valassis was
advised by J.P. Morgan.
(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by