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Be Careful What You Wish for. . . —Cagle

December 2006
BITS AND PIECES

EVEN THE greatest, most legendary sports coaches have suffered a loss in the big game. Bob Burton endured one on Halloween day, when his $50 a share offer was trumped by RR Donnelley (RRD), which cruised past the Cenveo commander with a $52.50-per-share bid that Stephanie Streeter was all too happy to see.

We’ve all heard the adage that perception is reality; it’s been noted here (a.k.a. “Before You Go...” column) previously. Burton represents, in many minds, printing industry carpetbagging. He preys on the wounded animals, uses gimmicks to artificially stimulate their stock price, cuts production ranks razor thin to eliminate costs from the equation and then absconds 18 months later with briefcases full of money, all the while tracking the blood of dismissed employees all the way out the back door. He doesn’t offer long-term value.

That’s all a crock. He would have brought value to Banta.

But be careful what you wish for, Stephanie. Just keep these things in mind...and mark these words:

• Burton just extended his contract with Cenveo through 2010. That doesn’t sound like a man looking to make a quick getaway.

• Streeter is out of a job, anyway.

• There is considerable overlap of capabilities between RR Donnelley and Banta, more so than there is between Cenveo and Banta. Someone might say that Donnelley’s size and reputation, as well as the meshing opportunities with Banta across the specialty printing, catalogs and publications platforms, makes it a better fit than Cenveo, largely a commercial and package printer.

Then again, a skeptical person might react to it with the following assessment: “Wow, a lot of capacity is about to exit the landscape. They’ll consolidate in common markets and lop off a few thousand heads.”

• It says here that there will be more Banta blood shed by Donnelley than there would have been had Burton won the day. But Bob gets the black cowboy hat.

• Burton isn’t finished dealing. He’ll shake off this setback—chalking it up to a cowardly sucker punch by RRD—and then come back next spring with a new challenge in mind. And instead of Banta, he’ll be crafting overture letters to...oh, I don’t know...Cadmus, perhaps?

Most people can handle success with good grace and aplomb. But, as in sports, it is the way one responds to adversity that illustrates the true mark of a champion, be it on the gridiron, baseball diamond or in the board room.
 

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