RR Donnelley sent a letter to bankrupt Quebecor World, indicating its interest in acquiring the Montreal-based company and presenting a proposal for a $1.35 billion cash-and-stock deal ($957 million in cash, $394.2 million in stock). RRD said it wouldn't require financing for the proposed acquisition, and therefore wouldn't need shareholder approval.
Keep in mind that 1) RRD's offer comes at a time when its Q1 profit dropped 92%, and when Quebecor World is trying to emerge from bankrupcy, and 2) RRD's first move to buy Quebecor World—in a letter last August—received no response.
It will be interesting to see how (or if) Quebecor responds, but my general feeling is that two ships taking in water—and looking to take new tacks for survival and growth—shouldn't collide with one another until either or both have better direction. Perhaps RRD really wants Quebecor's key accounts, and if that's the case, it underscores the need for graphic communication firms to have a better value proposition than low prices (something "key accounts" for big printers tend to covet).
Can you think of a struggling company that has build a stronger future by buying another struggling firm offering the same basic products and services?
What do you think about the proposed deal?