RR Donnelley Jumps as Party Trying to Outbid Chatham Raises Offer

© Reuters.

By Dhirendra Tripathi – RR Donnelley & Sons Co’s stock (NYSE:) surged nearly 6% Thursday after the ‘strategic party’ that’s been trying to outbid private investment firm Chatham Asset Management raised its offer to buy the business communications provider.

The unidentified suitor is now offering to buy RR Donnelley for $11.50 a share in cash, according to a statement by Donnelley. The buyer had previously offered $11 a share, which was more than Chatham’s $10.85 a share.

Donnelley’s shares had climbed to a high of $11.31 by 11:15 AM ET on Thursday.

RR Donnelley continues to recommend Chatham’s offer. A proxy statement regarding that deal is expected to be filed Friday, and a shareholder vote is planned for Feb. 23.

The company was at the center of a bidding war between Chatham and Atlas (NYSE:) Holdings for more than a month until its board decided Dec. 10 to go with the former. Chatham already owns around 15% stake in the company.

If the company does agree for purchase by the strategic party, the latter will pay both the expense reimbursement and the Atlas termination fee refund to Chatham on the company’s behalf. This will amount to at least $32 million, according to the RR Donnelley release.

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