May 13, 2009 / 4:37 AM / in 10 years

Donnelley launches $1.35 billion Quebecor World deal

Quebecor World plant in LaSalle, Quebec is pictured here January 21, 2008. REUTERS/Christinne Muschi

TORONTO (Reuters) - Commercial printer R.R. Donnelley & Sons Co (RRD.N) said it has offered to buy the assets and properties of insolvent rival Quebecor World IQW.TO for about $1.35 billion in a cash and stock deal.

Donnelley said it will pay the commercial printer’s debtors about $957 million in cash, and 30 million of its shares, valued at $394.2 million, based on Monday’s closing price of $13.14 each.

The transaction, which is expected to add to Donnelley’s earnings within 12 months of combined operations, is not subject to any financing conditions and no shareholder approval is required, the company said in a statement.

Quebecor World said on Wednesday that its board is currently reviewing Donnelley’s proposal and will discuss it with its major stakeholders. It said it still plans to proceed with court hearings in Canada and the United States later this week to consider the approval of its restructuring plan.

Montreal-based Quebecor World, which is hoping to emerge from bankruptcy protection this summer, prints books, magazines, directories and advertising materials. It filed for court protection in January 2008 and currently has about 20,000 employees.

“We believe that the proposed transaction set out in this letter is superior for the Quebecor debtors and their creditors to the restructuring proposed by the plans in their current form,” Donnelley’s chief executive, Thomas Quinlan, said in a letter to Quebecor World management.

Shares of Chicago-based Donnelley were down 6.16 percent at $12.19 on the New York Stock Exchange at midday on Wednesday.

Reporting by Anurag Kotoky in Bangalore and Wojtek Dabrowski in Toronto, editing by Rob Wilson

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