Markets

News America and Valassis Once More in Talks on $500M Deal: Let's Go to the Audiotape!

By Jim Edwards

Updated on: February 4, 2010 / 6:37 PM EST / MoneyWatch

News America Marketing Group has withdrawn a motion that alleges a disagreement on its $500 million lawsuit settlement with Valassis (VCI), a rival supermarket coupon handler. The move appears to mean that the deal between the two companies is once more in flux.

Download NAM's new motion here.

The pair have been locked in a years-long war over grocery coupons and supermarket ads involving allegations of antitrust activity, corporate spying, threats and other gossipy behavior.

The pair cannot even agree on their agreement, it seems. Four days after reaching a deal to end the litigation in which NAM would pay Valassis $500 million, NAM filed a motion insisting that Valassis was refusing to honor its half of the bargain. Today it told the judge: Er ... never mind!

The talks are ongoing.

Meanwhile, NAM parent News Corp. (NWS) filed a 10-Q with the SEC, describing the deal as it sees it. In addition to the cash, the deal says:

... the parties will also agree to mutual business practices that will require the parties to adhere to certain antitrust laws.

The devil is in the details here. NAM uses the words "parties" (plural) twice and believes the business practices -- a ban on bundling services in predatory pricing deals -- are "mutual." That's a clear indicator that NAM believes the agreement goes both ways. In its original motion, the company complained that Valassis believed only NAM was bound by the agreement.

If NAM is wrong on this, serious consequences could arise: Telling investors the deal means one thing when in fact it meant another is a no-no in SEC land. And it would not be difficult to find out whether Valassis or NAM has the accurate version of events -- NAM's motion states that the deal was agreed orally in a tape-recorded session before being committed to paper ...