RR Donnelley Provides Update on Share Repurchase Transaction
January 03 2005 - 12:54PM
PR Newswire (US)
RR Donnelley Provides Update on Share Repurchase Transaction Update
to Press Release Issued Today at 9:25 a.m. ET CHICAGO, Jan. 3
/PRNewswire-FirstCall/ -- R.R. Donnelley & Sons Company
(NYSE:RRD) and GSC Partners today announced their entry into
agreements that will result in the sale by GSC Partners of its
entire 4.8% interest in RR Donnelley for $356 million, including
the repurchase of $200 million of GSC Partners' holdings by RR
Donnelley in a share repurchase transaction. Details of the
transactions are as follows: -- GSC Partners has sold 4.66 million
shares of RR Donnelley common stock to Goldman, Sachs & Co. to
be sold in an underwritten offering. Goldman, Sachs & Co. is
the underwriter for this offering. -- RR Donnelley has agreed to
repurchase 5.96 million shares of its common stock from GSC
Partners for a purchase price of $200 million. The $33.53 per share
price represents a 5% discount to the closing price of RR Donnelley
common stock on December 31, 2004. Both transactions are expected
to close on January 6, 2005. Alfred C. Eckert III, Chairman and
Chief Executive Officer of GSC Partners, and Robert F. Cummings,
Jr., a senior advisor to GSC Partners, are directors of RR
Donnelley who recused themselves from the board's consideration of
RR Donnelley's repurchase from GSC. On December 16, 2004, RR
Donnelley announced that its board of directors had authorized a
$300 million share repurchase, $200 million of which is being used
for the repurchase from GSC Partners. As a result, RR Donnelley
will not proceed with a $200 million accelerated share repurchase
at this time. RR Donnelley is authorized to use the remaining $100
million available under the share repurchase through a variety of
methods, including open market purchases, block transactions,
accelerated share repurchase arrangements, or private transactions.
Such purchases may be made from time to time and may be
discontinued at any time. Mark A. Angelson, Chief Executive Officer
of RR Donnelley, commented, "The share repurchase from GSC, which
first was proposed to us late last week, represents an opportunity
for the Company to accomplish the goals that led us to consider a
$200 million accelerated share repurchase, but at a significant
discount to market and without the pricing risk inherent in a
collared buy back transaction. As we stated when we announced the
share repurchase program last month, the program reflects our
confidence in the future profitability of RR Donnelley and delivers
on our promise to invest our shareholders' capital wisely and avoid
shareholder dilution when practicable." Mr. Eckert commented, "The
sale of our entire interest in RR Donnelley is motivated by our
desire to take profits for our limited partners from this fine
investment. We hold the RR Donnelley management team, with whom we
have been associated since GSC Partners invested in Moore
Corporation Limited in 2000, in the very highest regard. They have
created extraordinary value for us and others, and they are focused
intensely on enhancing shareholder value in the future." This press
release shall not constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of the common stock
in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such state. A shelf registration statement
relating to the common stock that the selling stockholders intend
to sell has previously been filed with, and declared effective by,
the Securities and Exchange Commission. Any offer, if at all, will
be made only by means of a prospectus, including a prospectus
supplement, forming a part of the effective registration statement.
Copies of the final prospectus supplement and accompanying
prospectus, when available, may be obtained from Goldman, Sachs
& Co., 85 Broad Street, New York, NY, 10004, Attn: Prospectus
Department, telephone (212) 902-1171. About RR Donnelley RR
Donnelley (NYSE:RRD) designs, manages and produces words and
images, and brings them to life on paper and in digital form for
customers in the publishing, healthcare, advertising, retail,
technology, financial services, and many other industries. Founded
140 years ago, the company provides solutions in commercial
printing, forms and labels, direct mail, financial printing, print
fulfillment, business communication outsourcing, logistics, online
services, digital photography, and content and database management.
The largest companies in the world and others rely on RR
Donnelley's scale, scope and insight through a comprehensive range
of online tools, variable printing services, and market-specific
solutions. As the largest printer in North America with strong
positions across the globe, RR Donnelley is changing the role of
print in every marketplace it serves. For more information, visit
the Company's web site at http://www.rrdonnelley.com/ . Use of
Forward-Looking Statements This press release contains
"forward-looking statements" as defined in the U.S. Private
Securities Litigation Reform Act of 1995. Readers are cautioned not
to place undue reliance on these forward-looking statements and any
such forward-looking statements are qualified in their entirety by
reference to the following cautionary statements. All
forward-looking statements speak only as of the date of this news
release and are based on current expectations and involve a number
of assumptions, risks and uncertainties that could cause the actual
results to differ materially from such forward-looking statements.
Many of the factors that could cause material differences in the
expected results of RR Donnelley relate to the integration of Moore
Wallace Incorporated, which was acquired by RR Donnelley on
February 27, 2004. These factors include, without limitation, the
following: the development and execution of comprehensive plans for
asset rationalization, the ability to eliminate duplicative
overhead without excessive cost or adversely affecting the
business, the potential loss of customers and employees as a result
of the transaction, the ability to achieve procurement savings by
leveraging total spending across the organization, the success of
the organization in leveraging its comprehensive product offering
to the combined customer base as well as the ability of the
organization to complete the integration of the combined companies
without losing focus on the business. In addition, the ability of
the combined company to achieve the expected net sales, accretion
and synergy savings will also be affected by the effects of
competition (in particular the response to the transaction in the
marketplace), the effects of pricing of paper and other raw
materials and fuel price fluctuations and shortages of supply, the
rate of migration from paper-based forms to digital formats, the
impact of currency fluctuations in the countries in which RR
Donnelley operates, general economic and other factors beyond the
combined company's control, and other risks and uncertainties
described in RR Donnelley's periodic filings with the Securities
and Exchange Commission (SEC). Readers are strongly encouraged to
read the full cautionary statements contained in RR Donnelley's
filings with the SEC. RR Donnelley disclaims any obligation to
update or revise any forward-looking statements. DATASOURCE: R.R.
Donnelley and Sons Company CONTACT: Dan Leib, Vice President,
Investor Relations of R.R. Donnelley and Sons Company,
+1-312-326-7710, or Web site: http://www.rrdonnelley.com/
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