Donnelley Aims For Toronto Sun Publisher
The printing services giant submitted a bid to purchase the daily newspaper’s publisher, Quebecor World, for $1.35 billion, out of bankruptcy.
May 13, 2009
RR Donnelley & Sons Co., a printing services provider based in Chicago, is looking to acquire Quebecor World Inc., publisher of the Toronto Sun daily newspaper and Le Journal de Montreal, for about $1.35 billion.
The newspaper publisher released a statement of Tuesday noting that Donnelley’s proposal “offered Quebecor World’s debtors and their creditors superior terms to the current draft amended reorganization plans.”
As Donnelley extends a generous offer to Quebecor, it faces its own set of difficulties in the economic downturn. In the first quarter of this year, the commercial-printing company’s revenue dropped 92% from the Q1 last year.
Donnelley would pay $700 in cash and in addition to 30 million shares of its common stock, about $394.2 million, according to Monday’s closing price and $700 million in cash on Quebecor’s balance sheet.
The bankruptcy of Quebecor lead a trend of failing newspapers that were soon to follow suit. In December 2008, The Tribune Co. filed for bankruptcy. In February, EW Scripps Co., publisher of the Rocky Mountain News ran its last issue of the Pulitzer Prize-winning newspaper, after failing to find a buyer. In 2008, the newspaper lost $16 million.
In addition, Sun-Times Media Group Inc. filed for Chapter 11 bankruptcy protection in March. A month later, Source Interlink Cos., the publisher of Motor Trend and several other consumer magazines filed prepackaged Chapter 11 bankruptcy.
Donnelley will conduct its due diligence process, and noted that it is not in need of additional capital to complete the transaction.
As of midday, Donnelley stock traded at $12.12 per share.
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