R.R. Donnelley & Sons (RRD) : buyout offer from Chatham Asset Management at $7.50/share

The printing and marketing company received a buyout offer from its largest shareholder, 00.
The private investment firm that currently owns 14.9% shares and 41.4% debt in R.R. Donnelley has been chasing the company for more than a year now to restructure and unlock greater value for shareholders. 

 

 

 

 

 

 

 

R.R. Donnelley & Sons : Chatham Asset Management confirms offer to acquire R.R. Donnelly for $7.50/share in cash

• Chatham Asset Management, a private investment firm that manages funds that beneficially own approx. 14.9% of the outstanding common stock and which is the largest bondholder of R.R. Donnelley & Sons, today in a letter sent to RRD's Board submitted an offer to acquire all the common stock of RRD not already owned by Chatham for $7.50/share in cash.
• The transaction represents a 52.1% premium over yesterday's closing price of $4.93/share, a 6.2% premium over the 52-week high of $7.06/share, and a 92% premium over the 365-day volume-weighted average price of $3.9/share. Chatham would finance the transaction using cash on hand and external financing and has secured a highly confident letter from Jefferies Group supporting its ability to raise all necessary funds.
• To facilitate the transaction, Chatham is willing to equitize and/or subordinate its entire debt position, reducing RRD's total debt by 23%.
  • As a result, Chatham calculates that annual interest expense on a pro forma basis would decline by approx. $36 mln, or 33%.