Banta Corporation (NYSE:BN) was facing its deadline to either accept or reject Cenveo's bid for the company last night when a new bidder suddenly jumped on the scene and purchased the company for $1.3 billion. RR Donnelley & Sons Co. and Banta announced the Board-approved merger at around midnight last night, not long after Cenveo had withdrawn its bid for the company. The buyout is valued at $52.50 per share, a 17% premium to Tuesday's closing price, and is expected to close in the first quarter of 2007.

All of this news comes after Banta had so adamently insisted that it was not for sale after rejecting several bids from Cenveo, including the latest one for $50 per share. For more history about the battle between Cenveo and Banta, see our prior articles. When Cenveo withdrew their offer last night, they included a letter to management:

"I am disappointed (but not surprised) that Banta has not accepted or even entered into discussions with us regarding our proposal to acquire Banta for $50 per share (or $34 per share if the acquisition is completed after the record date for your "special" dividend). Since you have had plenty of time to review our proposal and have not responded at all, Cenveo has no other choice but to withdraw its current and all prior proposals to acquire Banta... 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."

The follow-on bid by RR Donnelley was almost a slap in the face for Cenveo, who could not understand why the company would not sell itself. Ofcourse now we know that it was because they had another buyer all along. But why was this deal kept so secret and inked overnight? Well, many believe that the company likely kept the bid secret to discourage Cenveo from making any possible counter-offers, which may have been difficult for RR Donnelley to match. While this may work out for management and employees, it is simply not in the best interest of shareholders who could have received a higher buyout price in the event of a bidding war. Regardless, it appears as if Banta's life as a seperate company is coming to an end.

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