Donnelley Offers to Buy Bankrupt Quebecor

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Printing services provider RR Donnelley & Sons Co. said Tuesday night it offered to buy Canadian media group Quebecor World Inc., which has filed for bankruptcy, for about $1.35 billion.

Donnelley, whose offer was apparently unsolicited, said it will pay Quebecor’s creditors $700 million in cash, $394.2 million in Donnelley common stock based on Monday’s closing price and $257 million in Quebecor’s cash on hand to buy the Montreal-based company’s assets.

The proposal is “superior” to the current restructuring plan that has been developed in U.S. and Canadian bankruptcy courts, Donnelley said in a statement issued shortly before midnight.

Chicago-based Donnelley said it would need to conduct due diligence but that it had no need of financing.

A Quebecor spokesman was not immediately available for comment.

Quebecor, which filed for protection from its creditors early last year, owns the Toronto Sun daily newspaper and its equivalents in Ottawa, Calgary, Winnipeg and Edmonton. It also owns Le Journal de Montreal and numerous other English-language and French-language publications as well as various Internet properties and TV stations.

Donnelley’s offer comes as its own business struggles. Its first-quarter profit tumbled 92 percent on restructuring and impairment charges, while sales dropped on weakening demand.

Excluding restructuring and impairment charges, earnings from continuing operation attributable to shareholders were 24 cents per share. Analysts surveyed by Thomson Reuters expected net income of 38 cents per share. Analysts’ estimates normally exclude one-time items.

Donnelley said “the publicly-listed common stock of the pro forma combined company will offer attractive investment characteristics for current creditors of the Quebecor Debtors when compared to the newly-issued securities of a stand-alone reorganized company.”

Donnelley shares closed down 15 cents Tuesday at $12.99.

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