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RR Donnelley Provides Update on Share Repurchase Transaction

Press release from the issuing company

CHICAGO, Jan. 3 -- R.R. Donnelley & Sons Company and GSC Partners today announced their entry into agreements that will result in the sale by GSC Partners of its entire 4.8% interest in RR Donnelley for $356 million, including the repurchase of $200 million of GSC Partners' holdings by RR Donnelley in a share repurchase transaction. Details of the transactions are as follows: -- GSC Partners has sold 4.66 million shares of RR Donnelley common stock to Goldman, Sachs & Co. to be sold in an underwritten offering. Goldman, Sachs & Co. is the underwriter for this offering. -- RR Donnelley has agreed to repurchase 5.96 million shares of its common stock from GSC Partners for a purchase price of $200 million. The $33.53 per share price represents a 5% discount to the closing price of RR Donnelley common stock on December 31, 2004. Both transactions are expected to close on January 6, 2005. Alfred C. Eckert III, Chairman and Chief Executive Officer of GSC Partners, and Robert F. Cummings, Jr., a senior advisor to GSC Partners, are directors of RR Donnelley who recused themselves from the board's consideration of RR Donnelley's repurchase from GSC. On December 16, 2004, RR Donnelley announced that its board of directors had authorized a $300 million share repurchase, $200 million of which is being used for the repurchase from GSC Partners. As a result, RR Donnelley will not proceed with a $200 million accelerated share repurchase at this time. RR Donnelley is authorized to use the remaining $100 million available under the share repurchase through a variety of methods, including open market purchases, block transactions, accelerated share repurchase arrangements, or private transactions. Such purchases may be made from time to time and may be discontinued at any time. Mark A. Angelson, Chief Executive Officer of RR Donnelley, commented, "The share repurchase from GSC, which first was proposed to us late last week, represents an opportunity for the Company to accomplish the goals that led us to consider a $200 million accelerated share repurchase, but at a significant discount to market and without the pricing risk inherent in a collared buy back transaction. As we stated when we announced the share repurchase program last month, the program reflects our confidence in the future profitability of RR Donnelley and delivers on our promise to invest our shareholders' capital wisely and avoid shareholder dilution when practicable." Mr. Eckert commented, "The sale of our entire interest in RR Donnelley is motivated by our desire to take profits for our limited partners from this fine investment. We hold the RR Donnelley management team, with whom we have been associated since GSC Partners invested in Moore Corporation Limited in 2000, in the very highest regard. They have created extraordinary value for us and others, and they are focused intensely on enhancing shareholder value in the future." This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the common stock in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. A shelf registration statement relating to the common stock that the selling stockholders intend to sell has previously been filed with, and declared effective by, the Securities and Exchange Commission. Any offer, if at all, will be made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. Copies of the final prospectus supplement and accompanying prospectus, when available, may be obtained from Goldman, Sachs & Co., 85 Broad Street, New York, NY, 10004, Attn: Prospectus Department, telephone (212) 902-1171.

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