Valassis CFO: Advo Deal Would Dilute Shares

Going through with a deal to buy Advo Inc. for $1.3 billion would dilute the stakes of its shareholders, Valassis Communications Inc. chief financial officer Robert Recchia testified Wednesday, according to wire service reports.

On the witness stand in the third day of the trial of Valassis' lawsuit seeking to escape the deal, Recchia said Livonia, MI-based Valassis' would have to issue shares to raise money, which would dilute existing shares.

According to the CFO, Advo's financial results would not support cheaper debt or bank financing for the deal. That means Valassis would be forced to sell equity to close a transaction that it no longer wants, Recchia said.

The trial is expected to run to Dec. 22.