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The board of directors determined that the proposal would reasonably expect to result in a “high-level proposal”
RR Donnelley & Sons (NYSE stock code:RRD) (“RRD” or “Company”) today announced that it has received an unsolicited non-binding “alternative acquisition proposal” as previously announced with Chatham Asset Management LLC (“Chatham”) As defined in the definitive merger agreement of its subsidiaries, as of December 14, 2021 (the “Chatham Merger Agreement”), the strategic party (the “strategic party”) acquires all issued RRD’s shares for US$11.00 in cash per share Ordinary shares, subject to other terms and conditions (“Strategic Party Proposal”). In accordance with the terms of the Chatham merger agreement, Chatham’s affiliates have agreed to acquire the company for $10.85 per share in cash. As previously announced, on November 27, 2021, RRD has received a non-binding proposal from a strategic party to acquire all issued ordinary shares of RRD for $10.00 per share in cash, subject to other terms and conditions .
On December 29, 2021, the company’s board of directors (“Board of Directors”), after consulting its external financial advisers and legal advisers, sincerely determined that the strategic party proposal would reasonably expect to result in a “high-level proposal” (as defined in the Chatham Merger Agreement) . At present, the board of directors has not determined that the strategic party’s proposal constitutes a priority proposal, and there is no guarantee that the strategic party’s proposal will result in a transaction or any alternative transaction will be concluded or completed.
RRD also confirmed today that it has received a letter from Chatham regarding the strategic party proposal (“Chatham Letter”), which was previously shared with Chatham in accordance with the requirements of the Chatham Merger Agreement. In the Chatham letter, Chatham stated that it believed that the strategic party’s proposal did not constitute and would not reasonably expect to result in a high-level proposal, and that Chatham believed that the board of directors would otherwise conclude that it would violate the company’s obligations under the Chatham Merger Agreement. Chatham further stated in the Chatham letter that he believes that the company must not negotiate or discuss with strategic parties or provide non-public information or data to strategic parties.
According to the Chatham Merger Agreement, if the company terminates the Chatham Merger Agreement to enter into a final merger agreement for the strategic party proposal, the company must pay Chatham US$12 million in expense reimbursement (“Expense Reimbursement”). In addition, The company will be required to repay the US$20 million previously paid by Chatham to Chatham to cover the termination fee (“Atlas Termination Fee Refund”) due under the company’s now terminated final merger agreement with Atlas Holdings LLC affiliates. In the strategic party’s proposal, the strategic party has indicated that it will agree to pay Chatham on behalf of the company in such incidents and reimburse the Atlas termination fee.
At present, the company is still bound by the Chatham Merger Agreement and abides by the terms and conditions of the Chatham Merger Agreement, which will remain valid unless and until the Chatham Merger Agreement is terminated. Therefore, in accordance with the requirements of the Chatham Merger Agreement, the Board of Directors has not yet made a “recommended change” (as defined in the Chatham Merger Agreement), reiterated its recommendation on the Chatham Merger Agreement, and rejected all “alternative acquisition agreements” (definition See Chatham Merger Agreement). In addition, in accordance with the requirements of the Chatham Merger Agreement, the company will submit a preliminary power of attorney for the transactions proposed by the Chatham Plan…
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