Data Communications Management Corp T.DCM

DCM Comp RRD up 40% after Takeover Bid

[warrenbuffetwho]

R.R. Donnelley & Sons Company (NYSE: RRD) (“RRD” or the “Company”) today announced that it has received an unsolicited proposal from Chatham Asset Management, LLC ("Chatham") to acquire all of the outstanding shares of RRD for $7.50 per share in cash. Trading up 40% on the day, it wouldn't be shocking to see some spill over for other companies in the space. It also is a good indicator that DCM is very undervalued in its currrent state and shows the value of the space as this is a massive premium to pay for a company that operates very similarly to DCM. 

[Bezostothemoon]

Love to this, did a bit more digging and found some interesting details on why their doing this.   "Our investments in these industries are driven by our conviction that they continue to provide essential services in the 21st century" said Chatham Asset Management, LLC. Also, from a Bloomberg article Chatham said it believed the company could be worth more than $13 a share if it

[Torontojay]

As of August 8th I have computed the following from an earlier post. R.R. Donnelley & Sons (rrd) was trading at a premium to industry peers on an EV to ebitda analysis.  Dcm has increased gross profits over the last 4 years by 3.7% compounded annually. On the other hand, Supremex has increased their gross profits by 5.5% compounded annually. R.R Donnelley and Sons as well as Arc Document

[lscfa]

DCM mgmt could take the co. private, continue improving operations and go public some time later at a much higher valuation. 

[zalmonella]

Wouldn't they need to get rid of the debt first to do that?  I can't see the employees coming up with enough and nobody would lend them money based on the shaky earnings history.