Shares of RR Donnelley & Sons (RRD) - Get R.R. Donnelley & Sons Company Report jumped on Tuesday after the commercial printer agreed to be acquired by the private-equity firm Atlas Holdings for $8.52 a share cash.
At the same time, Chatham Asset Management, which manages funds that beneficially own 14.9% of R.R. Donnelley, lifted its bid for the company to between $9 and $9.50 a share.
As calculated by Reuters, the $8.52-a-share offer amounts to roughly $620.3 million in equity value. The enterprise value of the deal is around $2.1 billion.
RR Donnelley shares at last check were trading at $9.08, up 38%. The deal price is a premium of 29% over Monday's close at $6.60.
The deal [“culminates] a thorough, multiyear process to maximize value for RRD stockholders," Chairman John Pope said in a statement.
Chatham, which is RRD's largest bondholder, in October had offered $7.50 a share.
The Chatham, N.J., investment firm said in a letter to RR Donnelley's board that the directors' "decision to sign a definitive agreement with Atlas, that may include a substantial breakup fee, without any conversation with us regarding our Original Offer raises major concerns."
The Wall Street Journal reported that RR Donnelley said it would review other bids in the next 25 calendar days.
Meantime, the acquisition by Atlas, Greenwich, Conn., is slated to close in the first half.
The transaction will be financed through a combination of equity, financing by Atlas affiliates and debt financing by lenders including JPMorgan Chase and Macquarie Capital, RR Donnelley said.