RRD mystery buyer withdraws offer, group suffers cyber attack

Richard Stuart-Turner
Wednesday, February 2, 2022

The unnamed "strategic buyer" that made an unsolicited non-binding bid to acquire RR Donnelley for $11.50 (£8.48) per share in cash has withdrawn its offer.

RRD cyber attack: certain corporate data "was accessed and exfiltrated"
RRD cyber attack: certain corporate data "was accessed and exfiltrated"

On 14 December, following a bidding war, the US-headquartered multichannel marketing and business services group said it was set to be acquired by its largest investor, Chatham Asset Management, for $10.85 per share in cash.

The situation took a fresh turn on 27 December when the company said it had received an unsolicited non-binding ‘Alternative Acquisition Proposal’, as defined in its definitive merger agreement with affiliates of Chatham, from a strategic party, that was unnamed but referred to as the ‘Strategic Party’, to acquire all of the outstanding shares of RRD’s common stock for $11.00 per share in cash, subject to other terms and conditions.

The ‘Strategic Party’ later increased its offer price to $11.50 per share in cash. It has not provided specific reasons for now withdrawing its offer.

In a statement released today (2 February), RRD said it remains subject to the $10.85 per share Chatham merger agreement.

The company has scheduled the special meeting of stockholders for purposes of voting on the Chatham merger agreement “and the transactions contemplated thereby” for 23 February 2022.

“The Chatham merger agreement has been unanimously approved by the RRD board of directors and the board again reaffirms its recommendation that stockholders vote for the Chatham merger agreement and the transactions contemplated thereby,” RRD stated.

“The company urges stockholders to vote their shares today to approve the Chatham merger agreement and the transactions contemplated thereby at the company’s upcoming special meeting.”

The Chatham transaction is expected to close in the first quarter of 2022, subject to customary closing conditions, including the approval of RRD stockholders.

Shares in RRD were up by 1.27% to $11.16 at close yesterday but had a pre-market price today of $10.75.

Separately, last month RRD confirmed that it had suffered data theft in a ransomware attack.

In an SEC filing released on 18 January the company said it had “identified a systems intrusion in its technical environment”. In response it promptly implemented a series of containment measures to address the situation “including activating its incident response protocols, shutting down its servers and systems and commencing a forensic investigation”.

“The company has also taken steps to further enhance its security measures safeguarding its information technology environment and client data,” it added.

RRD said it continues to be actively engaged in restoring the affected systems and returning to normal levels of operations, and “believes that the steps taken to isolate and remediate the identified threat have been effective”.

It added: “At this time, however, the company has become aware that certain of its corporate data was accessed and exfiltrated, the nature of which is being actively examined.

“Based on information known to date, the company believes the access and exfiltration was in connection with the previously disclosed systems intrusion [which the company had previously flagged up in a separate filing on 27 December] and not a new incident.”

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