UPDATE: R.R. Donnelley Bids to Acquire Quebecor World for $1.3 Billion
Proposal comes as Quebecor reorganizes, to emerge from bankruptcy protection.
RELATED MEMO: R.R. Donnelley's Letter
R.R. Donnelley has approached fellow magazine printer Quebecor Worldâ€”which expects to emerge from bankruptcy protection this summerâ€”about acquiring the assets of the company for approximately $1.3 billion.
â€śQuebecor and R.R. Donnelley have long represented a strong strategic fit with one another and, through this proposal, we have the opportunity to join them together in a way that greatly benefits stakeholders of both companies, including Quebecor Worldâ€™s debtors and their creditors,â€ť R.R. Donnelley president and CEO Thomas J. Quinlan III said in a statement.
It was not immediately clear if a merger of this size would conflict with antitrust regulations. A Quebecor World spokesperson did not immediately return a request for comment. UPDATE: Quebecor acknowledged receipt of the letter on Wednesday, and said its board of directors is in the process of reviewing the proposal with major stakeholders.
According to the proposal, Chicago-based R.R. Donnelley has offered to purchase Quebecorâ€™s assets in three parts: approximately $700 million cash to Quebecorâ€™s debtors; $257 million in cash on Quebecorâ€™s balance sheet; and $394.2 million in stockâ€”representing approximately 15 percent of Donnelleyâ€™s outstanding shares. Donnelley said its proposal was based on Quebecorâ€™s estimated value following its court-ordered reorganization.
Last month, Quebecor World reached an agreement with its creditors that it said will allow the company to emerge from bankruptcy protection, possibly as early as mid-July. The agreement is based on the terms of a consolidated restructuring plan that is intended to recapitalize and â€śsubstantially deleverageâ€ť the company from its pre-filing levels.
In connection with the restructuring, Quebecor said it anticipates having to arrange exit financing at levels below its current debtor-in-possession financing facility, the company said.
Quebecor filed for bankruptcy protection in January 2008. In March, Quebecor reported a net loss from continuing operations of $943.9 million for 2008 compared to a net loss from continuing operations of $1.8 billion in 2007. The results included $165.9 million in taxes.