RELATED MEMO: R.R. Donnelley's Letter [0]

R.R. Donnelley has approached fellow magazine printer Quebecor World—which expects to emerge from bankruptcy protection this summer—about acquiring the assets of the company for approximately $1.3 billion.

“Quebecor 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 World’s debtors and their creditors,” 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 [0], Chicago-based R.R. Donnelley has offered to purchase Quebecor’s assets in three parts: approximately $700 million cash to Quebecor’s debtors; $257 million in cash on Quebecor’s balance sheet; and $394.2 million in stock—representing approximately 15 percent of Donnelley’s outstanding shares. Donnelley said its proposal was based on Quebecor’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 “substantially deleverage” 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.