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RR Donnelley Shares Rise on Chatham's Increased Takeover Bid

Business communications company Donnelley got a buyout bid for $10.25 a share in cash from Chatham Asset Management.
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R.R. Donnelley & Sons  (RRD) - Get R.R. Donnelley & Sons Company Report shares rose solidly Tuesday in a big down day for the market, after the business communications company got a takeover bid for $10.25 a share in cash from Chatham Asset Management.

Donnelley recently traded at $10.59, up 4%. That indicates investors believe there may be an even higher bid coming. A $10.25 share price would value the company at about $747 million.

On Nov. 3, Donnelley agreed to be acquired by private equity firm Atlas Holdings for $8.52 a share in cash. Then on Nov. 16, Donnelley received a bid from Chatham for $9.10 a share in cash. Since then it has been negotiating with Chatham.

Then, on Nov. 7, 2021, “as part of its ‘go-shop’ process, RRD received an alternative acquisition proposal … from a strategic party for $10.00 per share in cash,” the company said.

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But finally on Tuesday, it announced Chatham’s $10.25-per-share bid. RRD stock has soared 367% year to date amid takeover speculation.

The company will review the new Chatham offer “to determine [its] course of action,” it said.

Meanwhile, the S&P 500 index has slid 1.8% Tuesday, amid concern about the Omicron Covid variant. But J.P. Morgan maintains that this year’s 22% rally isn’t over. It sees the index hitting 5,000 in the first half of 2022, up 9% from 4,575 recently.

“Global supply chain pressures are easing,” JPMorgan analysts led by Chief Global Market Strategist Marko Kolanovic wrote in a commentary.

“If this persists, the S&P 500 should continue to deliver strong revenue growth and record margins.”