Donnelley bids $1.35 billion to takeover rival Quebecor

14 May 2009

RR Donnelley & Sons Co.(RRD), the Chicago-based printing services major, said on Tuesday that it has submitted a written indication expressing interest to acquire the assets of rival Canadian media group Quebecor World Inc. for a $1.35 billion cash and stock deal, apparently in a move to expand its activities to the northern half of the continent.

The Montreal-based Quebecor filed for bankruptcy protection in January 2008 in the United States and Canada, with assets of around $500 million and liabilities amounting more than $1 billion. It filed a new restructuring plan last week, hoping to emerge from bankruptcy this July.

The offer involves $957 million in cash and $394 million in 30 million Donnelley shares as of the closing price on May 11, the company press release said. The Donnelley stocks are listed in the New York stock exchange and the company has a market capitalisation of around $2.7 billion.

Quebecor is a leading Canadian publishing house and a market leader in advertising inserts and circulars, catalogs, direct mail products, magazines, books, digital media etc. It is the printer of popular Time and Cosmopolitan magazines, Harry Potter books in Canada, and owns newspapers in Toronto, Ottawa, Calgary, Winnipeg and Edmonton apart from numerous other English and French publications and other media.

RR Donnelley, founded more than 144 years ago, is the world's premier full-service provider of print and related services to a variety of customers including publishing, healthcare, insurance, advertising, packaging, retail, technology and financial services. It has more than 60 facilities spread over four continents. The company reported a turnover of $11.6 billion in 2008.

Donnelley chief executive Thomas J. Quinlan III said: ''Quebecor and RR 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.''