RR Donnelley & Son Co whose shares ...

RR Donnelley & Son Co whose shares have risen 18 percent in the last three weeks, may prepare takeover offers from two disposes of buyout firms, sources said.

Madison Dearborn Partners LLC has teamed up with Thomas H to leeward Partners LP and Carlyle cluster to make a bid for the largest North American printing company, which has a market value of $73 billion, brace people said. Blackstone Group LP and Texas Pacific dispose may make a competing give for the Chicago-based company, pair other sources said.

They all spoke onward condition their names not be used because Donnelley hasn't announced that it's for sale.

Donnelley, which prints telephone directories and magazines, including Martha Stewart Living, may be an attractive takeover candidate, in part because it bring outs $1.3 billion in cash annually, said Citigroup Inc. analyst Matthew Troy Buyout firms target companies with steady cash pours that can be used to pay sin taken on in their purchases.

Donnelley has a "relatively stable business model" said Troy who has a "buy" rating upon Donnelley.

No representatives of Donnelley or any of the buyout firms would elucidation

Shares advanced 62 cent to $3436 Speculation that the company would be sold has helped the shares rally from a two-year depressed of $28.50 on July 27

Donnelley management, l through CEO Mark Angelson, may invest with the winning team, said the same person who is negotiating the possible buyout. Discussions are far enough along that a deal may be struck in the nearest month, another person who is directly involved said.

The company's sales last year were $843 billion, up 18 percent from the prior year, boost by the agency of the March 2004 acquisition of Moore Wallace Inc., a Canadian provider of forms and labels, for $32 billion. Donnelley has $27 billion of sin and $139 million of cash.

Donnelley's bondage rating will likely be intersect because of the buyout talks, according to traders who bet forward the creditworthiness of companies in the credit-default swap market.

The perceived risk of owning Donnelley's shortcoming surged by roughly 45 percent Wednesday, according to Banc of America Securities LLC

A buyout "would be a disaster for credit quality," analysts at Egan-Jones Ratings Co said in a research note. The firm carve its rating on Donnelley to BB+ common level below investment grade, from BBB+

Copyright CHICAGO SUN-TIMES 2006

Provided on ProQuest Information and Learning Company. All rights Reserved