Quebecor World gets $1.35 billion purchase offer from R.R. Donnelley

By Caroline Salls

Pittsburgh, May 13 - Quebecor World Inc. has received a non-binding proposal under which R.R. Donnelly & Sons Co. has offered to buy substantially all of Quebecor World's assets for $1.35 billion in cash and stock, according to an 8-K filed by R.R. Donnelly with the Securities and Exchange Commission.

Under the non-binding proposal, R.R. Donnelley has offered to pay about $700 million in cash, which the potential buyer said is equal to the cash to be distributed under Quebecor's draft reorganization plans, plus $257 million of balance sheet cash and 30 million shares of R.R. Donnelley common stock worth $394.2 million, which represent roughly 15% of the outstanding shares.

According to an R.R. Donnelley news release, R.R. Donnelley is prepared to move quickly to a legally binding purchase agreement, pending the completion of due diligence.

R.R. Donnelly said it believes that the non-binding proposal offers terms that are superior to Quebecor's draft amended reorganization plans.

"Quebecor World 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," R.R. Donnelly president and chief executive officer Thomas J. Quinlan III said in the release.

"Our offer would significantly enhance our ability to provide customers more comprehensive end-to-end printing solutions, expand our geographic reach into the important Canadian market and better balance our capacity with customer demand - all while achieving significant immediate and long-lasting synergies."

Quebecor World, a Montreal-based printing and marketing company, filed for Chapter 11 bankruptcy on Jan. 21, 2008 in the U.S. Bankruptcy Court for the Southern District of New York and filed for protection under the Companies' Creditors Arrangement Act in Canada. Its Chapter 11 case number is 08-10152.

R.R. Donnelley provides print and related services and is based in Chicago.

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