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RRD board announces expiration of “go-shop” period and qualification of “excluded parties”

R.R. Donnelley & Sons Company announced today the expiration of the “go-shop” period set forth in the previously announced definitive merger agreement with affiliates of Atlas Holdings, dated as of November 3, 2021, the receipt of an “alternative acquisition proposal” as defined in the Atlas Merger Agreement and further developments with respect to a previously announced proposal from Chatham Asset Management. Under the terms of the Atlas Merger Agreement, affiliates of Atlas have agreed to acquire the Company for $8.52 per share in cash.

As previously announced, RRD received an unsolicited proposal from Chatham on November 16, 2021, to acquire all of the outstanding shares of RRD not already owned by Chatham for $9.10 per share in cash, and thereafter RRD has been engaged in negotiations with Chatham regarding the terms and conditions of the proposal. Additionally, on November 27, 2021, and as part of its “go-shop” process, RRD received an alternative acquisition proposal from a strategic party for $10.00 per share in cash, subject to other terms and conditions (the “Go-Shop” proposal).

On November 28, 2021, the company’s board determined, in good faith after consultation with its outside financial advisor and legal counsel, that the Chatham and Go-Shop proposals would reasonably be expected to lead to a “superior proposal” (as defined in the Atlas Merger Agreement), thereby making each of Chatham and such strategic party an “excluded party” under the terms of the Atlas Merger Agreement. At this time, the Board has not determined that the Chatham Proposal or the Go-Shop Proposal constitutes a Superior Proposal, and there can be no assurances that a transaction will result from either proposal or that any alternative transaction will be entered into or consummated.

Under the Atlas Merger Agreement, the Company is required to pay a $20-million termination fee and expense reimbursement to Atlas if the Company terminates the Atlas Merger Agreement in order to enter into a definitive merger agreement with respect to either the Chatham or Go-Shop proposals by 11:59 p.m. (Chicago time) on December 9, 2021.

Chatham has agreed to pay the termination fee and expense reimbursement to Atlas on the Company’s behalf in such event. The Company would be required to repay Chatham for such termination fee and expense reimbursement under certain circumstances in connection with a potential termination of the proposed definitive merger agreement with Chatham.

At this time, the Company remains subject to the Atlas Merger Agreement and is complying with the terms and conditions of the Atlas Merger Agreement, which remain in effect unless and until the Atlas Merger Agreement is terminated. Accordingly, subject to and as required by the Atlas Merger Agreement, the Board has not made a “Change of Recommendation” (as defined in the Atlas Merger Agreement), reaffirms its recommendation of the Atlas Merger Agreement and rejects all “Alternative Acquisition Agreements” (as defined in the Atlas Merger Agreement). The Company does not intend to disclose developments with respect to this process unless and until it determines it is appropriate to do so, subject to the terms of the Atlas Merger Agreement.