UPDATE: RR Donnelley's CEO Mark A. Angelson held a conference call this morning and also appeared on CNBC. He sees at least $75 million in savings including the $35 million in efficiencies that Banta has already announced. Angelson also noted that many Banta locations are very close to RRD facilities giving the company an opportunity to expand or close in these locales. On CNBC, he was asked about depressing trends in print volume. Angelson stated that new media like the internet is driving print and that RRD's size gives the company flexibility to continue to deliver earnings for shareholders. In stark contrast to Burton, Angelson called Banta a wonderful company and Stephanie Streeter, Banta's Chair and CEO, a great leader...
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Five years ago, Robert G. Burton, CEO of Moore Corporation announced the election of Mark A. Angelson to the Board of Directors and to the position of Non-Executive Chairman. Burton left Moore in 2002 and several mergers and acquisitions later Angelson became CEO of RR Donnelley. Today Burton is CEO of Cenveo and on the losing side for control of Banta. Ironically, Angelson will claim Banta.
Last night, R.R. Donnelley and Banta jointly announced that Donnelley will acquire Banta in an all-cash deal valued at $1.3 billion - or $36.50 per share after the special dividend of $16.00 per share already declared by Banta.
This announcement is a blow to Cenveo and CEO Robert Burton. Burton used his same odd tactics (sending letters to Banta and the press simultaneously) and harsh tone that he has used in other deals. This time those tactics failed. Banta pulled out all stops to avoid being owned by Cenveo.
Interestingly, Burton removed his offer a few hours before this announcement was made. In yet another letter to Banta he called the company a sinking ship:
"I believe that you and your board have not fulfilled your fiduciary responsibility to Banta's shareholders. You must now consider the ramifications of your actions to ignore us.
"Your current and future business plan is flawed and your $35 million cost savings plan is a joke. I believe that you will need to eliminate at least $75 million in costs for Banta to be competitive during the next few years."After you pay a dividend that no one wants and your stock price drops down to the twenties, you will understand what I have been trying to tell you all along -- Banta's senior leadership is not experienced and does not fully understand what is happening in the printing industry today. Your people just don't get it. Our management team's skill set of reducing expenses and delivering results over many years is the perfect solution for Banta's future success and your obligations to Banta's shareholders. Under its current leadership Banta is a ship floating on borrowed time that is about to sink."
Several hours after Burton sent this letter, Banta and Donnelley made their announcement. Now Banta's shareholders will receive essentially $2.50 more per share from RR Donnelley than what Cenveo offered.
Burton has stated that Cenveo has other acquisition targets in sight besides Banta. Maybe next time, his tactics will change.
Example of Burton Letters:
October 19, 2006
September 21, 2006
October 31, 2006
Discussion
By Adam on Nov 01, 2006
I would be embarrassed to work for Burton. He sounds like a real jerk.
By Steve on Nov 01, 2006
Mr Burton wins either way. His tactics result in speculative increases in the market price of the target firm which he takes a position in through various channels and if he fails in acquiring the target firm, he sells his postions at a higher valuation and takes his personal profit. His actions forced Banta to quickly evaluate their business plan and take actions that should have been taken much sooner to keep the company healthy and profitable. I do not agree with all of Mr. Burtons actions but it is hard to deny that he is successful.
By Spencer on Nov 01, 2006
It's hard to fathom Burton's bull-in-a-china shop tactics. How they bring any benefit to Cenveo's customers or shareholders (let alone the company's reputation) is beyond me.
By Jim on Nov 01, 2006
Steve's comments are accurate, remember Creo?
By Dr Joe Webb on Nov 08, 2006
I guess this time Mr. Burton got beaten up by a girl :) .... and her investment bankers.... Even if Streeter does not stay in RRD, she will land on her feet elsewhere and do quite well. Banta played the hand they were dealt quite well. Burton lost but made lots of money. It obviously pays to lose. As far as his tactics? It's called intimidation. He certainly grabs headlines, and when he goes after a company that has lots of institutional holders, they don't care about the company, they just care about the deal. That was one of Banta's problems in my mind, they had so many institutional shareholders they had to do something. The real question is where does Burton go next. He needs an acquisition that can add value to CVO. Don't be surprised if it's Valassis or Vertis.
By Rick on Nov 15, 2006
It's a shame that the people of Banta had to endure the politics of Burton and his cronies. Banta is a great company with best of class leadership. Their profitability and stock price has been exceptional compared to other publicly held printers over the past decade. Congratulations to RRD! Hopefully they will keep the talent that made Banta the class act of the industry.
Discussion
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