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RRD receives an unsolicited proposal to acquire the company for $11 per share


December 30, 2021
By PrintAction Staff

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R.R. Donnelley & Sons Company receives an unsolicited non-binding “Alternative Acquisition Proposal,” as defined in its previously announced definitive merger agreement with affiliates of Chatham Asset Management, dated December 14, 2021 (the “Chatham Merger Agreement”), from a strategic party (the “Strategic Party”) to acquire all of the outstanding shares of RRD’s common stock for $11 per share in cash, subject to other terms and conditions (the “Strategic Party Proposal”).

Under the terms of the Chatham Merger Agreement, affiliates of Chatham have agreed to acquire RDD for $10.85 per share in cash. As previously announced, on November 27, 2021, RRD had received a non-binding proposal from the Strategic Party to acquire all of the outstanding shares of RRD’s common stock for $10 per share in cash, subject to other terms and conditions.

On December 29, 2021, RRD’s board determined, in good faith after consultation with its outside financial advisor and legal counsel, that the Strategic Party Proposal would reasonably be expected to lead to a “Superior Proposal” (as defined in the Chatham Merger Agreement). At this time, the board has not determined that the Strategic Party Proposal constitutes a Superior Proposal, and there can be no assurances that a transaction will result from the Strategic Party Proposal or that any alternative transaction will be entered into or consummated.

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RRD has also confirmed receipt of a letter from Chatham regarding the Strategic Party Proposal, which had previously been shared with Chatham, as required by the Chatham Merger Agreement. In the Chatham Letter, Chatham stated its belief that the Strategic Party Proposal does not constitute, and would not reasonably be expected to lead to, a Superior Proposal, and that it is Chatham’s belief that a conclusion otherwise by RRD would be a breach of the company’s obligations under the Chatham Merger Agreement. Chatham further stated its belief that RRD is not permitted to engage in negotiations or discussions with, or to furnish nonpublic information or data to, the Strategic Party.

Under the Chatham Merger Agreement, RRD is required to pay a $12 million expense reimbursement to Chatham (the “Expense Reimbursement”) if the Company terminates the Chatham Merger Agreement in order to enter into a definitive merger agreement with respect to the Strategic Party Proposal. In addition, RRD would be required to reimburse Chatham for the $20 million payment previously made by Chatham to cover the termination fee due under RRD’s now-terminated definitive merger agreement with affiliates of Atlas Holdings (the “Atlas Termination Fee Refund”). In the Strategic Party Proposal, the Strategic Party has stated it would agree to pay both the Expense Reimbursement and the Atlas Termination Fee Refund to Chatham on RRD’s behalf in such event.

At this time, RRD remains subject to the Chatham Merger Agreement and is complying with the terms and conditions of the Chatham Merger Agreement, which remain in effect unless and until the Chatham Merger Agreement is terminated.