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Donnelley Ends Quebecor Chase

Quebecor to move ahead with reorganization plan.



Dylan Stableford By Dylan Stableford
06/11/2009

After having its latest, $1.82 billion bid to buy Quebecor World rejected by that company’s board, R.R. Donnelley said Wednesday that it would no longer pursue an acquisition of the fellow magazine printer.

The official end of Donnelley’s pursuit effectively means Quebecor will remain a standalone company, and that Quebecor will move ahead with its reorganization plan.

“We believe that our proposal was undoubtedly in the best interests of creditors based on a comparison of the distributions under our proposal with the distributions under the proposed stand-alone plan of reorganization,”  Thomas Quinlan, Donnelley’s president and chief executive, said in a statement. “We are particularly disappointed because of the efforts and concessions made by us to adapt our proposal in response to concerns that were communicated to us.”

Last month, Donnelley sent an unsolicited letter to Quebecor expressing its interest to buy the company for about $1.35 billion. On Monday Donnelley sent another letter to Quebecor, increasing its original offer to roughly $1.82 billion—about $476 million more cash than QW’s reorganization plan calls for.

Quebecor’s board of directors felt the deal would trigger a lengthy antitrust review, which could delay its creditors from receiving the cash that would come to them as part of the restructuring.

“This would have been an excellent fit for [us] and the best opportunity for the Quebecor World creditors,” Quinlan said. “However, given our view of the Quebecor World operations, a transaction ascribing a higher value to Quebecor World than we offered in our last proposal is simply not in the interests of RR Donnelley.”

Donnelley, he said, will continue “to pursue other strategic initiatives.”

Dylan Stableford By Dylan Stableford
06/11/2009




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