The US headquartered multichannel marketing and business services group had agreed a $2.1bn (£1.54bn) deal to be taken over by affiliates of Atlas Holdings, but subsequently received a higher bid from its largest investor, Chatham Asset Management.
Atlas Holdings also owns LSC Communications, one of three companies formed when the old RR Donnelley & Sons group was split up.
RR Donnelley has been engaged in negotiations since the rival bid was filed, and has announced that as part of its “go-shop” process, on 27 November “RRD received an Alternative Acquisition Proposal from a strategic party for $10.00 per share in cash, subject to other terms and conditions”.
The Atlas deal is for $8.52 per share, while Chatham has offered $9.10.
However, 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 that, 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”.
“At this time, the board has not determined that the 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,” the board stated.
Under the terms of the Atlas Merger Agreement, RRD would be required to pay a $20m termination fee and expense reimbursement to Atlas if RRD terminates the agreement to enter into an alternative definitive merger agreement with either the Chatham Proposal or Go-Shop Proposal, with a deadline of 11:59pm (Chicago time) on 9 December.
The RRD board said that it has not made a change recommendation in respect of the competing bids, and has reaffirmed its recommendation of the Atlas Merger Agreement.
