Following Quebecor World's rejection of R.R. Donnelley's original $1.3 billion takeover offer, the Chicago-based printing giant sent a revised proposal to QW yesterday, adding another US$178 million in cash and US$21.6 million in stock to the original bid, bringing the value of the new proposal to US$1.55 billion.

In addition, Donnelley is offering to help pay for Quebecor World's financing costs until the deal is closed, to assume “significant” pension liabilities, and to agree to make the deal tax-neutral to Quebecor World. RDonnelley says in its letter that the offer would bring US$476 million more cash to the Quebecor World estate than is provided for in the re-organization plan.

The letter was filed with the U.S. Securities and Exchange Commission. It reveals that the two companies have been in discussions since Donnelley's original bid on May 12.

Quebecor World's debtor-in-possesion financing runs out on July 21. Donnelley has offered to pay 50% of the costs to extend the financing if the deal goes through, and 100% of the costs if it the deal is blocked by regulators.

RR Donnelley also states that it has done extensive work assessing whether the deal will get regulatory approval and is confident that the transaction can be completed quickly. It says it’s ready to start filing documents next week.

If Quebecor World is interested in pursuing the deal, it must respond to Donnelley's proposal by the end of the business day on June 10 (i.e. tomorrow).

Donnelley's offer is non-exclusive, meaning Quebecor World can still look for a better offer.

Quebecor World creditors are scheduled to vote on the company’s restructuring plan at a meeting in Montreal on June 18.

Related:

• Rival sweetens bid for Quebecor World [Globe and Mail]