After 3 Swings at Quebecor, Has Donnelley Struck Out?

R.R. Donnelley wanted a quick answer to its third attempt to acquire Quebecor World. It got one.

QW revealed today that its board didn’t even wait for the sun to set on yesterday’s sweetened offer from its printing rival. The board decided that its plan to emerge from bankruptcy protection this summer is still better than what RRD is offering.

The reorganization plan “presents fewer risks to completion than would the transactions proposed by RRD,” QW stated in a document filed with U.S. and Canadian bankruptcy courts.

In theory, QW’s creditors could overrule the board and try to bring Donnelley back to the table. But representatives of the creditors turned down RRD’s second offer last Friday (June 5), the document revealed, so they apparently share the board’s view that pursuing a deal with Donnelley would not be worth the risk, even at a premium price.

In theory, RRD could come back with yet another offer. But its letter yesterday said its third try was its “highest and best offer”.

QW issued a statement today saying,"Quebecor World is proceeding on the timetable contemplated under its proposed reorganization plans so as to successfully emerge from both the U.S. and Canadian insolvency proceedings by mid-July 2009. In that connection, the Company is pleased to announce that it is well advanced in its exit financing process.”

QW would emerge from bankruptcy with a new name – not yet revealed – and perhaps a smaller footprint. Some observers think its Chapter 11 status has prevented it from shutting unprofitable plants to cope with dwindling demand for print.

It’s not clear whether RRD would be as interested in purchasing QW after the bankruptcy reorganization is complete.