RRD Provides Update on the Unsolicited Non-Binding Acquisition Proposal From the 'Strategic Party'

R.R. Donnelley & Sons Company announced the receipt of an update to the unsolicited non-binding "Alternative Acquisition Proposal" (as defined in the Company’s previously announced definitive merger agreement with affiliates of Chatham Asset Management, LLC, dated as of December 14, 2021), received from the Strategic Party on December 27, 2021.

On January 3, 2022, the Strategic Party had indicated to RRD that it was targeting January 21, 2022 for a submission of a binding proposal. In lieu of submitting a binding proposal, the Strategic Party delivered the non-binding Updated Strategic Party Proposal, which provides for the following, among other terms and conditions:

• Value: Increases the offered price to $11.50 per share in cash. Previously, the offered price by the Strategic Party was $11.00 per share in cash.
• Due Diligence: States that the Strategic Party has substantially completed its financial, legal, tax and other due diligence on RRD and its business.
• Committed Financing and Timing: Does not include committed debt and equity financing and states that the Strategic Party requires an additional three weeks to obtain committed financing (February 8, 2022).
• Chatham-Related Covenants: Removes the previously included conditions to the execution of the proposed Strategic Party merger agreement that required Chatham to release and dismiss Chatham’s litigation and claims made against RRD, and to vote its shares of RRD common stock to approve the Strategic Party merger agreement.
• Non-Binding and Conditional: The Updated Strategic Party Proposal remains non-binding and subject to certain terms and conditions.

On December 29, 2021, the Board of Directors of the Company 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 Updated Strategic Party Proposal constitutes a Superior Proposal, and there can be no assurances that a transaction will result from the Updated Strategic Party Proposal or that any alternative transaction will be entered into or consummated.

Under the terms of the Chatham Merger Agreement, affiliates of Chatham have agreed to acquire the Company for $10.85 per share in cash. Under the Chatham Merger Agreement, the Company is required to pay a $12 million expense reimbursement to Chatham if the Company terminates the Chatham Merger Agreement in order to enter into a definitive merger agreement with respect to the Updated Strategic Party Proposal. In addition, the Company would be required to reimburse Chatham for the $20 million payment previously made by Chatham to cover the termination fee due under the Company’s now-terminated definitive merger agreement with affiliates of Atlas Holdings LLC. In the Updated 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 the Company’s behalf in such event.

At this time, the Company 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. Accordingly, subject to and as required by the Chatham Merger Agreement, the Board has not made a "Change of Recommendation" (as defined in the Chatham Merger Agreement), reaffirms its recommendation of the Chatham Merger Agreement and rejects all "Alternative Acquisition Agreements" (as defined in the Chatham Merger Agreement). In addition, as required by the Chatham Merger Agreement, the Company expects to file a definitive proxy statement in respect of the transactions contemplated by the Chatham Merger Agreement on January 21, 2022. RRD expects to schedule the special meeting of stockholders for purposes of voting on the Chatham Merger Agreement and the transactions contemplated thereby on February 23, 2022.

The Company does not intend to disclose developments with respect to this process unless and until it determines it is appropriate to do so, subject to the terms of the Chatham Merger Agreement.

The foregoing description of the Chatham Merger Agreement and the transactions contemplated thereby is subject to, and is qualified in its entirety by reference to, the full terms of the Chatham Merger Agreement, which RRD has filed on Form 8-K.

Source: RRD

The preceding press release was provided by a company unaffiliated with Packaging Impressions. The views expressed within do not directly reflect the thoughts or opinions of Packaging Impressions.