RR Donnelley (RRD) has received a revised proposal from its largest investor, Chatham Asset Management, as the bidding war over the future ownership of the company intensifies.

The US-headquartered multichannel marketing and business services group said today (30 November) that it has received a proposal from Chatham to acquire all of the RRD shares that it does not already own for $10.25 (£7.68) per share in cash.

Its previous offer was $9.10 per share, while a deal for RRD to be taken over by affiliates of Atlas Holdings had already been agreed at $8.52 per share.

Atlas Holdings also owns LSC Communications, one of three companies formed when the old RR Donnelley & Sons group was split up.

The RRD board of directors said it would “carefully review and consider” the revised Chatham proposal to determine the course of action that it believes is in the best interests of the company and RRD shareholders.

It said this was consistent with its fiduciary duties and in accordance with the terms of its definitive merger agreement with affiliates of Atlas.

“RRD shareholders do not need to take any action at this time and the board has not yet made any determination with respect to the Revised Chatham Proposal,” the board stated.

The company had been engaged in negotiations with Chatham regarding the terms and conditions of its earlier proposal and, additionally, on 27 November as part of the so-called “go-shop” period – which has now expired – it received an Alternative Acquisition Proposal from a strategic party for $10.00 per share in cash, subject to other terms and conditions.

The firm’s board is still subject to the terms of the previously agreed Atlas Merger Agreement, and is still recommending that offer.

The RRD board said, on 28 November, “in good faith after consultation with its outside financial advisor and legal counsel, that each of the Chatham Proposal and Go-Shop Proposal would reasonably be expected to lead to a ‘Superior Proposal’ (as defined in the Atlas Merger Agreement), thereby making each of Chatham and such strategic party an ‘Excluded Party’ under the terms of the Atlas Merger Agreement”.

In today’s statement the board added: “At this time, the board has not determined that the Revised Chatham Proposal or the Go-Shop Proposal constitutes a Superior Proposal, and there can be no assurances that a transaction will result from either proposal or that any alternative transaction will be entered into or consummated.”

Shares in RRD were up by 10% yesterday, closing at $10.22.


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