Xerox Corp. privately rejected a bid to merge its document business with R.R. Donnelley & Sons Co., according to people familiar with the matter.
in January announced plans to break into two businesses, splitting its business-outsourcing operations from its legacy printer and copier division. As is often the case with such breakups, Xerox has drawn some interest in potential deals since then, people familiar with the matter said.
, which is also in the process of breaking up, expressed interest in putting its operations together with Xerox’s remaining copier business, the people said.
The proposal called for a deal that would have been structured as a so-called Reverse Morris Trust, a tax-efficient set-up in which R.R. Donnelley would get a slight premium, one person said. The R.R. Donnelley proposal called for its executives to take control, and for several hundred million dollars in cost cuts, the person added.
The Xerox board reviewed the proposal with its advisers before telling R.R. Donnelley Thursday it wasn’t interested — believing its own plan is less risky, the people said.
An expanded version of this report appears on WSJ.com.
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