On Dec. 29, 2021, the RRD board determined the “Strategic Party Proposal would reasonably be expected to lead to a ‘Superior Proposal.'” Chatham Asset Management is not taking the upstart offer lying down. In announcing the new bidder, RRD also confirmed the receipt of a letter from Chatham regarding the strategic party proposal. In the letter, Chatham stated the Strategic Party offer “does not constitute, and would not reasonably be expected to lead to, a Superior Proposal,” and would be a breach of its current obligations under the Chatham acquisition agreement.
A shareholder proxy vote will be forthcoming should the existing $10.85 per share Chatham deal proceeds as announced. But if the RRD board breaks the Chatham agreement and reaches an agreement with the mysterious “Strategic Party”, the shareholder vote would be put on hold.” RRD will have to pay Chatham $12 million in expense reimbursement, as well as $20 million in other termination fees if the deal is quashed. Strategic Party has pledged to pay those fees, according to RRD. That doesn’t mean Chatham is done, however, as it could turn in another bid to surpass the offer from Strategic Party.