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New Donnelley Offer Rejected by Quebecor

Printer says own plan has ‘superior recovery,’ fewer risks.



By Jason Fell
06/09/2009

Quebecor World has effectively rejected R.R. Donnelley’s $1.825 billion offer to acquire the company.

According to a document filed yesterday with the U.S. bankruptcy court in the southern district of New York, Quebecor’s board of directors, after reviewing Donnelley’s latest offer, determined that its $1.5 billion plan of reorganization offers “superior recovery” and contains fewer risks than Donnelley’s offer.

Quebecor said it is proceeding with its proposed reorganization plan and expects to emerge from Chapter 11—in the U.S. and Canada—by mid-July.

A Donnelley spokesperson did not immediately return a request for comment.

Donnelley on Monday sent a letter to Quebecor increasing its original offer from $1.35 billion to roughly $1.825 billion—about $476 million more cash than QW’s reorganization plan calls for. In addition, Donnelley’s updated offer ensured the “retention of key employees … through the closing of any transaction and for a transition period following closing.”

The offer was Donnelley’s “highest and best,” the company said.

Donnelley’s offer also raised concerns since a deal of this size could trigger a lengthy antitrust review, which could delay Quebecor’s creditors from receiving the cash that may be coming to them as part of the restructuring.

Last month, R.R. Donnelley sent an unsolicited letter to Quebecor expressing interest in purchasing the printer for roughly $1.35 billion. In April, Quebecor World reached a $1.5 billion agreement with its creditors that it said will allow the company to emerge from bankruptcy protection.

A Quebecor creditor's meeting is scheduled for June 18.

By Jason Fell
06/09/2009




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