RR Donnelley & Sons is one of the main market movers. Its share price skyrocketed yesterday after the company’s biggest shareholder offered a new deal to buy outstanding shares at a 52% premium.
Market news rarely leaves participants unimpressed, even during this month’s stock market drops. Even more important, retail investors should pay attention to insider news or acquisition deals – it shows proof that certain investors believe the company may be undervalued. RR Donnelley (RRD) stock price shot up yesterday after news of a potential deal reached the markets.
Let’s find out why RR Donnelley’s main shareholder is willing to purchase outstanding shares at a 52% premium.
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What Is RR Donnelley & Sons?
RR Donnelley & Sons provides communication services to businesses across 28 countries. It has about 30,000 clients and 33,000 employees.
Should I Buy RR Donnelley & Sons Today?
RRD’s main shareholder is Chatham Asset Management, which addressed a letter to RRD’s board on Tuesday. The letter contained a deal according to which Chatham is ready to pay a 52% premium, reaching $7.5 per share for the company’s stock price. Chatham currently owns 15% of the common shares.
Following this news, RRD’s share price increased by 33.7% yesterday, boosting the company’s value significantly. The managing member of Chatham, Anthony Melchoirre, has pushed several times to make significant changes at the company, believing that it is worth more than $13 per share if it sells non-core assets and makes a series of other operational changes.
RR Donnelley & Sons Price Prediction 2021
RRD’s stock currently trades at $6.57 per share and is estimated to reach $7 in the next 12 months. Its main shareholder, however, believes that the company is worth more than $13, provided it carries on with the deal and several operational changes.
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