Cenveo Boss Sends Rival Printer Banta CEO Offer Letter

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Print and visual communications provider Cenveo Inc. said it sent an offer letter Aug. 8 to Banta Corp. chairman and president/CEO Stephanie Streeter.

Written by Cenveo chairman/CEO Robert G. Burton Sr., the letter states that Mr. Burton was disappointed in hearing that Banta., Menasha, WI, was not for sale.

Cenveo, Stamford, CT, and Banta are complementary businesses that together create a $3 billion "print powerhouse" that would be better able to compete in the marketplace, Mr. Burton said.

The letter was made public "in the spirit of full disclosure for both shareholders at Banta and Cenveo" since Ms. Streeter had not returned Mr. Burton's phone calls or e-mails, he wrote.

"We sincerely hope that, on further reflection together with Banta's other directors, you and Banta's entire Board will share our enthusiasm for the transaction," Mr. Burton said.

Cenveo proposes to acquire Banta for $46 per share in cash. Banta's stock surged after the news was announced Aug. 9 and closed at $45.63 Wednesday afternoon, up 34.24 percent since Tuesday's closing number.

Late Wednesday, Banta released a statement confirming receipt of what it referred to as "an unsolicited, highly conditional indication of interest" from Cenveo to acquire Banta.

In a response letter to Mr. Burton sent on Wednesday, Ms. Streeter expressed disappointment that Cenveo's letter, which was faxed to Banta late Tuesday night, was released publicly before the company had time to review it. It also asserts that Ms. Streeter and Mr. Burton have never spoken directly and that Ms. Streeter had already agreed to meet with Cenveo's financial advisors to discuss the company's interest in Banta prior to Cenveo publicly releasing its letter.

Banta on July 26 made public a significant restructuring of its print business, reorganizing five divisions into two.

Banta said the move was the result of the ongoing evolution of the print industry. The company wants to remove significant costs from its print sector infrastructure, while at the same time becoming more competitive in the marketplace.

The reorganization is expected to generate annualized pre-tax savings of approximately $3 million beginning in 2007.

Further reorganizations are expected as the company looks to continue to streamline its operations and administrative functions.

Meanwhile, Banta's second-quarter revenue from continuing operations totaled $361 million compared to $366 million during the same period last year. Earnings from continuing operations were $16.1 million versus $14 million in last year's second quarter. Diluted earnings per share were 66 cents compared to 56 cents in 2005's second quarter.

The company's print, catalog and publications, direct marketing and supply chain management sectors all reported lower revenue in the second quarter compared to last year. However, the book and literature management divisions posted revenue increases.


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