Giant swap, still subject to approval, sees Transcontinental take over former Quebecor World printing plants

Canada's largest printer, Transcontinental Inc. (which is also the country's largest publisher of consumer magazines) just got a whole lot bigger as it has conducted a huge swap with U.S.-based Quad/Graphics for the assets Q/G took over from the troubled former printing giant Worldcolor Press (formerly Quebecor World). Quad/Graphics retained only a Vancouver plant to service its U.S. Pacific Northwest clients.

Under terms of the swap Transcon sold three Mexican printing plants and some other assets to Quad/Graphics and bought 6 Canadian printing plants and a prepress firm. No value was announced for the deal itself but it would be worth tens of millions of dollars in property value alone. Quad/Graphics has said that Transcontinental takes over about US$75 million in pension and post-retirement obligation. The Canadian plants employ 1,500 people and the Mexican operations had 900. Three of the former Quebecor World plants are located in Ontario, two in Quebec, one in Alberta and one in Nova Scotia and the forecasted revenue for all of them was about US$310 million in revenues in 2011while revenues for the Mexican assetswere expected to be C$67 million. Francois Olivier, the CEO of Transcon says in a company release that the transactions will generate at least $40 million in earnings within a year or two of the deal closing. Olivier said that the print markets suffered from overcapacity and the takeover of the plants would allow Transcon to make better use of about $700 million in investments it has made recently.

Quad/Graphics bought the Canadian assets of Worldcolor Press Inc. (previously Quebecor World) in early 2010 for about $1.3 billion and at the time the CEO said the takeover would enhance its leadership position in the printing industry. At least in Canadian terms, that mantle now rests squarely on the shoulders of Transcontinental.  

The deal is subject to approval under the Canadian Competition Act and one of the questions that might be asked is whether approval would have been forthcoming had Transcon done a straight-ahead takeover offer for Worldcolor when it was in trouble and available. Whether this consolidation gives Transcontinental leverage that could significantly reduce competition in the industry, hence driving up print pricing, remains to be seen.

It seems highly likely, however,that there will be significant rationalization of plant, management and staffing. 

Related posts:

• Quad/Graphics shifting magazine printing from Edmonton to Aurora
• Quad/Graphics closure of 5 U.S. plants is fallout from takeover of Worldcolor (nee Quebecor World)
• Giant Quad/Graphics Inc. buys Montreal-based Worldcolor Press
• Worldcolor consolidates printing plants with loss of 150 jobs
• New logo for former Quebecor World magazine printer
• Courts approve Quebecor World reorganization; now the tax man has to say yes
• Donnelley gives up in bid to take over Quebecor World
• Quebecor World board rejects sweetened Donnelly offer 
• Printer vs. printer: R. R. Donnelly makes unsolicited bid for Quebecor World 
• Quebecor World seeks, and gets, bankruptcy protection

Printer vs. printer: R. R. Donnelly makes unsolicited bid for Quebecor World

One of the world's biggest printers is making an offer to swallow one of the world's biggest printers. Both are major suppliers to the Canadian and U.S. magazine publishing industry.

R. R. Donnelly & Sons of Chicago is making an unsolicited offer of $1.35 billion for the troubled Quebecor World in what may have huge implications for both QW's debtors and for its employees.

In a letter to Quebecor World president and CEO Jacques Mallette, Thomas J. Quinlan III, the president and CEO of R. R. Donnelly, says that the company has been carefully following the U.S. bankruptcy protection (Chapter 11) proceedings and the reorganization plans in both the U.S. and Canada.

After reviewing the draft Plans in light of our own valuation of the relevant companies as stand-alone businesses, we believe that the proposed transaction set out in this letter is superior for the Quebecor Debtors and their creditors to the restructuring proposed by the Plans in their current form.

The proposal is to pay the debtors of Quebecor

• approximately US$700,000,000 in cash plus
• $257,000,000 of cash on QW's balance sheet (estimated as of June 30, 2009) plus
• 30 million shares of RRD common stock,with a value of US$394,200,000.

The stock would represent about 15% of the total capitalization of R. R. Donnelly & Sons Inc.

Donnelly is a multinational company, with some 60 plants and is involved in commercial printing, direct mail, financial printing, print fulfillment, labels, forms, logistics, call centers, transactional print-and-mail, print management, online services, digital photography, color services, and content and database management to customers in the publishing, healthcare, advertising, retail, technology, financial services and many other industries.

Quebecor World was forced to seek bankruptcy protection in the U.S. and suffered a $1.7 billion loss last year, though it is saying that it expects to see a modest $7 million profit next year and said it hoped to exit all forms of creditor protection, with a wholly reorganized business by this July.

The company suffered a major liquidity crisis at the end of 2007. At the time it was predicted that QW would be broken up and its various parts cherry-picked by major competitors like Donnelly.

Things got so bad that, after being a proud part of Quebecor Inc.'s empire, the troubled printer was more or less cut adrift when its parent firm told its printing subsidiary to remove the name Quebecor from its signage, because it financial woes were dragging down the parent and other division, Quebecor Media.

Quebecor World was the result of the 1999 US$2.7 billion merger of Quebecor Printing Inc. and World Colour in a US$2.7 billion deal thereby becoming a major player who was said to have kept the price of printing very competitive, at least in the U.S. At one point, Quebecor World could credibly claim that it was the world's largest commercial printer, with 28,000 employees and approximately 90 printing plants and related facilties worldwide. (Many observers said the cash crisis the company suffered was a logical outcome of the huge costs of acquisition and modernization of World Colour.)

Quebecor World becomes World Color Press as it emerges from bankruptcy

Quebecor World is to be renamed World Color Press as it is officially emerges from bankruptcy protection. The name change for the huge printer (it had been considering Novink as its new handle) brings the company around almost full circle; World Color was the major printing asset absorbed by Quebecor Inc. and merged with its subsidiary, Quebecor Printing, that resulted in Quebecor World becoming the largest printer in the world. The company said that it would roll out a new branding campaign within 60 days.

According to a story in Folio:

As part of its plans of reorganization, Quebecor World closed on $800 million in exit and drew approximately $540 million to repay its debtor-in-possession credit facility. The company’s previously issued and outstanding multiple voting shares, redeemable first preferred shares and subordinate voting shares were effectively canceled.

According to president and CEO Jacques Mallette, the restructuring and reorganizing process “has made us financially healthier and allowed us to start fresh with a strong balance sheet and a leaner cost structure. We believe the company is now better positioned to meet the present and future competition in the industry and to create value for our stakeholders.”

Quebecor World in June rejected a series of unsolicited offers from competitor R. R. Donnelley to purchase it, ostensibly because the board felt there would be antitrust implications from such a consolidation.

Related recent posts:

• Courts approve Quebecor World reorganization; now the tax man has to say yes
• Donnelley gives up in bid to take over Quebecor World

Quebecor World beats a retreat from Europe

Quebecor World, the international printing arm of Quebecor Inc., which owns one of Canada's major magazine publishing operations (mostly in French) has admitted defeat and is retreating from the European printing market to concentrate on its North American printing business.

According to various reports including one in the Globe and Mail, it has announced that it is selling 18 plants in seven European countries to Dutch-based RSDB NV for $341-million (U.S) in a combined cash, debt and stock transaction.

Quebecor World will retain a 29.9-per-cent stake and two of five board seats in Roto Smeets Quebecor (RSQ), the merged entity made up of Quebecor World's European operations and RSDB's seven Dutch printing facilities and another in Hungary. Quebecor World employs 4,000 people in Austria, Belgium, Finland, France, Spain, Sweden, and Britain.

It is a humiliating climbdown for Quebecor and its chief executive Pierre Karl Peladeau (left) who championed the European acquisitions during the 1990s. But he had to bow to the reality of there being no end in sight to the red ink that had bled out of the European plants for several years.

The European operation ran into obdurate unions and anemic returns (in the 3rd quarter the division had profits of just 1.5% compared with 11% in the North American printing operations.

In a conference call with analysts, Quebecor World chief financial officer Jacques Mallette couldn't have been more clear: The company will not spend another cent in Europe. As such, debt rating agency DBRS called the transaction “slightly positive” in a note yesterday.

The deal gave Quebecor World an overall loss of $315 million in the 3rd quarter after accounting for $294 million in charges, including $272 million for its European unit. Quebecor World's stock price is down 44% over the past year, as investors could see no end to the problems the European operation posed.

Giant Quad/Graphics Inc. buys Montreal-based Worldcolor Press

[This post has been updated] Quad/Graphics Inc, has agreed to buy magazine printer Worldcolor Press Inc. of Canada, which prints magazines such as Time and Cosmopolitan.The sale price is about $1.3 billion. According to a story published on Bloomberg.com, the merged company, which will be publicly traded, will have 30,000 employees and combined sales of $5.1 billion.

Joel Quadracci, Quad/Graphics’s chief executive officer, will lead the new company as chairman, president and CEO, the company said.

“We will enhance our leadership position in the printing industry,” Quadracci said in the statement.

Shareholders of Worldcolor, which is based in Montreal (and until recently was called Quebecor World), will own about 40 percent of the combined company, the statement said. The Quadracci family will control the company through ownership of its Class B shares. Quad/Graphics will distribute $140 million in cash to its shareholders, the company said.

Quad/Graphics has $1.2 billion of financing from JPMorgan Chase & Co. and U.S. Bancorp to fund the acquisition and cash distributions and to refinance borrowings, the company said.

[Update: “I don’t see this as good news for magazine publishers as it will further reduce competition which may lead to higher print prices,” Bradner Smith & Company publication papers vice president Dan Walsh[told Folio: magazine]. “I would also not be surprised to see some Worldcolor plants shut down over the next year as a result of this purchase.”

The board of Worldcolor had turned down a $1.8 billion offer from another printing giant, R. R. Donnelly, last summer.]

Related posts:

• New logo for former Quebecor World magazine printer
• Courts approve Quebecor World reorganization; now the tax man has to say yes
• Donnelley gives up in bid to take over Quebecor World
• Quebecor World board rejects sweetened Donnelly offer 
• Printer vs. printer: R. R. Donnelly makes unsolicited bid for Quebecor World 
• Quebecor World seeks, and gets, bankruptcy protection
  

Quebecor World to be chaired by former head of major printing rival

Brian Mulroney is no longer chairman of the board of Quebecor World, replaced by a veteran of the U.S. printing industry Mark Angelson, according to a story from Canadian Press. It seems ironic that Angelson was the head of R. R. Donnelley, a major printing rival, until 2007. Donnelley was recently unsuccessful in an unsolicited $1.55 billion bid to take over Quebecor World as it emerges from bankruptcy protection.

Only one QW board member was returned at Monday's vote: CEO Jacques Mallette.

Other new appointees to Quebecor World's board include former Reader's Digest chief executive Tom Ryder and Jack Kliger, ex-president of Hachette Filipacchi. Both men are former chairmen of the Magazine Publishers' Association. Ryder sits on the boards of Amazon.com, Virgin Mobile and Starwood Hotels.

Filling out the nine-member board are Raymond Bromark, a retired senior partner of PricewaterhouseCoopers, turnaround specialist James Gaffney, printing industry veteran Michael Allen, former Alcan executive David McAusland, and Gabriel de Alba, managing director and partner of Catalyst Capital Group of Toronto.

The story said the appointments come a day after Quebecor's Canadian and U.S. creditors voted to support restructuring plans that will allow the company to emerge from bankruptcy protection.

Monday's vote will allow Quebecor World to convert nearly US$3 billion of debt into new equity. The Montreal-based printer has been under court protection in Canada and the United States since January 2008.

Quebecor World expects to unveil its new corporate name before Tuesday's New York Bankruptcy Court hearing confirming the creditors votes.

Quebecor World retrenches in Buffalo Niagara region

Quebecor World's decision to cut 200 jobs, or a a fifth of its workforce at its Depew printing plant in the Buffalo area has come as a real blow to upstate New York and Erie County, which depends on such high wage manufacturing job, according to a story in the Buffalo News.

Kevin Clarke, the president of Quebecor World North America's book and directory publishing services group was said to rarely let an opportunity go by to rail against what he thought were New York's high business costs (taxes, electricity and regulations) and how they make it hard for companies here to be competitive.

The announcement about the Depew plan "was another dose of sobering news for the Buffalo Niagara region, which has barely been able to muster any job growth since the recession ended almost five years ago," said the story. "And it was another sign of the struggles facing the region's manufacturers, which have been decimated by intense competition from Third World countries and other low-cost parts of the United States."

The immediate catalyst for the local job cuts was Quebecor World's impending loss of AAA TourBook production to a sister plant in Corinth, Miss., that is expected to be completed by next May. The Depew plant currently employs 875 people and layoffs are expected to begin in December and be spread out over several months, said the story. Restructuring goes beyond the local plant, it said, which also makes paperback books, board books, coupon books and newspaper inserts. Quebecor's profits have dropped for five straight quarters after the company lost three major clients last year and price competition intensified, analysts say.

Quebecor has been struggling "to adapt to the difficult conditions within the print industry," said Matt Wilcox, an analyst at KDP Investment Advisors in Vermont, in a report last week.

To adapt, Quebecor has been revamping its printing operations in North America and Europe. It's closing a magazine plant in Brookfield, Wis., and a book printing facility in Kingsport, Tenn., eliminating a total of 735 jobs. The company late last month said it would cut another 150 jobs by shutting a magazine plant in Red Bank, Ohio, and shifting that work to a nearby facility in Lebanon, Ohio, and other company facilities. Over the last five years, Quebecor has slashed more than 12,000 jobs worldwide, or about 28 percent of its work force, the article said.

The two-pronged restructuring strategy also has Quebecor investing heavily in new equipment, including the purchase of 22 new printing presses, according to Adam Shine, an analyst at National Bank Financial in Canada, who likened the company to a "falling machete" in a report earlier this year. None of the major equipment purchases revealed so far have been earmarked for Quebecor's Depew plant.

"As part of that $330 million North American investment plan," said the story, "Quebecor also is trying to boost its efficiency by shifting its assets to bigger, more specialized facilities.

"Quebecor officials believe the plan will put the company on the right course. But last week's news makes Quebecor workers here understandably nervous about whether they'll be around for the ride."

Quote, unquote: Printing history and Quebecor World's troubles

Quebecor World has provided publishers and catalogers with a valuable service for a long time, they have kept the cost of printing competitive. IF RRD, Quad and other large printers had their way, our costs would be significantly higher. To rationalize where Quebecor World is today, we have to take history into account.

First lets realize that the US plants started as WA Krueger, then became Ringier America and then World Color before becoming Quebecor World. Lets talk about the fact that the previous owners were interested in making money by any means and did not keep up with technology or invest in their infrastructure.

Lets face it, by the time Quebecor purchased World Color, the plants and equipment were becoming obsolete and were in desperate need capital expenditures and improvements. Lets think about the determination and faith that it took to consolidate plants and purchase a huge amount of equipment to bring them up to today's quality and efficiency levels. They accomplished this in a remarkably short period of time and while there were specific problems along the road they have reached the pinnacle only to have the financial bridge for the cost of modernization collapse.

-- an anonymous industrial supplier, commenting on the BoSacks blog about the problems faced by magazine printer Quebecor World.

Quebecor World's troubles continue; refinancing plan withdrawn

What if you want to sell, but nobody wants to buy? This situation has apparently happened again to Quebecor World, the giant printing arm of Quebecor Inc. which is also Quebec's largest publisher of consumer magazines.

According to a report by The Canadian Press, Quebecor World has withdrawn an ambitious refinancing plan (see earlier post) that it announced only a week ago, in which it had planned to sell about $250 million of shares and about $500 million in restructured or new corporate debt. But it apparently found insufficient demand. (A similar thing happened last August.) The result may be that the company will have to look at other ways to raise money, including selling assets.

The company has enough money until July, when its bank facility reduces by $250 million to $500 million, said Jamie Wetmore, senior financial analyst with DBRS, a leading ratings agency.

"They don't have a lot of head room but they are probably OK in the immediate term."

The ratings agency said the company's liquidity issues could intensify if it fails to refinance all or portions of its credit facilities by the first half of 2008. Its weak financial position could also lead to a reduced ability to execute on contract wins and improve its core business.

Concerns about the ability to refinance debt and weak quarterly results contributed to a large sell off of Quebecor World shares last week and this.

As of Wednesday morning, Quebecor World shares were selling for $2.29. A year ago, they were $17.25.

Quebecor World stock down 41% in a week, facing refinancing challenge

Quebecor World, the printing core of Quebecor Inc., which is Quebec's largest consumer magazine publisher, has had a heckuva week, or a heckuva month to think of it.

• It announced it would sell a total of $778 million worth of additional shares and debt securities to investors and to its controlling shareholder, Quebecor Inc. , in a refinancing of its debt and credit facilities. On Tuesday it said that it would be selling up to $213 million worth of its subordinate voting shares to the public through a syndicate of underwriters. It would also be selling about $400 million of new unsecured notes and $100 million of unsecured convertible debentures.
  
• Rating agencies promptly downgraded the company and put it on a credit watch.
• The company's stock price lost ground all week and Friday at one point lost almost 23% of its value and was down 41% for the week and more than 66% for the month.
• Banks have forced Quebecor World to reduce its credit facility, from a high of $1 billion, worried about its ability to raise cash.
• Quebecer World's high rating profile - DBRS gave a rating of B with negative trend - makes refinancing complicated and expensive.
• The company lost US$315 million in the third quarter as revenue declined to $1.41 billion, mainly the result of writedowns of its European printing operations.
• This on the heels of its November 7 announcement that it is selling its perennially troubled European printing business in a deal valued at US$341 million, retaining a minority ownership in a new company to be called Roto Smeets Quebecor.

Jamie Wetmore, senior financial analyst for DBRS said in an interview with The Canadian Press, that not only are there concerns about the look-ahead for the industry, but about the company's liquidity. "In terms of financing, there still is the question about whether or not they can even get it done in these markets.

"If they can't get the financing done, the liquidity issues remain significant."

(Even more alarming, Jan Hatzius, chief economist at Goldman Sachs wrote in a report that a global credit crunch may force lenders to cut the outlays available by up to US$2 trillion, triggering a "substantial recession" in the U.S, where Quebecor World has a substantial part of its holdings.)

Is Quebecor cooling to the printing business?

Andrew Willis of the Globe and Mail has an interesting posting on the Streetwise blog about Quebecor World, the massive printing arm of Quebecor Inc. Essentially, he is saying that recent actions of the parent company means it is leaving its printing subsidiary to twist in the wind. (See earlier post for background)

The oldest adage in business journalism is, follow the money. Doing so at Quebecor leads to interesting conclusions about the future of the media company’s stake in Quebecor World.

Willis points out that the company is investing most of its cash in its Nurun interactive media division rather than bailing out Quebecor World. QW has told preferred shareholders they have until the day after Boxing Day to convert their preferred shares (which stopped paying dividends last month) to common shares. The result would be to dilute the common shareholders by 66 per cent.

The harsh reality for Quebecor appears to be the view that printing is part of its past, while subsidiaries such as Nurun are the future. The parent company seems prepared to accept massive dilution on its stake in Quebecor World, and quite happy to let the printer refinance its debts on its own in 2008.

Wounded Quebecor World being circled by possible buyers

Speculation is rife that troubled printing giant Quebecor World, owned by Quebecor Inc., may be a takeover target, as its chief executive was shown the door yesterday and the company's share price plunged another 10% to $1.57 (it was more than $17 last February). According to a story in the Globe and Mail, quoting anonymous sources, U.S. printing giant R. R. Donnelly and takeover specialist funds Kohlberg Kravis Roberts & Co., Cerberus Capital Management LP and QW's crosstown rival Transcontinental Inc. are among those eyeing the wounded company.

It was announced by Quebecor Inc. boss Pierre Karl Péladeau that CEO Wes Lucas, who has been with the company less than two years, has left to pursue other opportunities, replaced by chief financial officer Jacques Mallette. Péladeau.

[Péladeau] wants the new boss at Quebecor World to cut any remaining fat at the company and the word is out that each unit must sink or swim, a source said.

Quebecor World has already been through several waves of cost cutting over the past years as it struggles with difficult market conditions and razor-thin margins.

Some analysts warned last week that the company faces an uncertain future, and possibly insolvency, in the face of a potential liquidity crisis.

For background, see earlier posts on this company.

Quebecor World's sale of European business falls through

Worse and worse. Giant multinational printer Quebecor World, controlled by Quebecor Inc., which is also is the largest magazine publisher in Quebec, saw its shares plunge more than 30 per cent on Thursday when it announced that its sale of its European printing business to a Dutch company had fallen through. Quebecor World shares dropped 79 cents to $1.47 on the Toronto Stock Exchange. A year ago, it was in the $17 range.

According to a Reuters report, shareholders of the Dutch group Roto Smeets de Boer had rejected the $341 million purchase of the Canadian printer's money-losing European business.

The setback will only exacerbate Quebecor World's struggle over liquidity. Last month QW withdrew a refinancing plan and it had also suspended dividends on two series of its preferred shares.

For background, see earlier posts.

Printer Quebecor World to emerge from bankruptcy

Quebecor World, one of the largest printers in the world and a major printer of magazines, says it is about to emerge from bankruptcy protection that was put in place January 2008. A restructuring has allowed the company to recapitalize and the announcement came after a year of negotiations with creditors.

"This is a consensual agreement among the three main creditor constituencies - the banks, the bondholders and the unsecured creditors," Quebecor World spokesman Tony Ross said yesterday.

The company plans to file an official plan of reorganization in Canada and in the U.S. by the end of Apriland hopes to exit all forms of creditor protection by mid-July.

When Quebecor secured creditor protection its lawyers said the company was only days away from a complete liquidity collapse, without sufficient cash to cover its payroll. One of the drastic measures it took after going into protection was to cut 12% of its workforce. Parent company Quebecor Inc. essentially cut its ties with its printing arm.

Last month, Quebecor reported it had halved its net loss in 2008 from continuing operations to $943.9 million from $1.8 billion in 2007.

Quebecor World wins contract to print Rolling Stone, Details and Men's Journal

Quebecor World may have taken a step or two back from the brink of bankruptcy with the signing of a multi-year agreement with Wenner Media to print Rolling Stone, US Weekly and the Men's Journal, according to a story in the U.K. magazine PrintWeek. Last week the company signed a $285m (£143.8m) textbook printing agreement with McGraw-Hill.

The deals are a sign of hope for Quebecor World which had up to now been plagued by clients jumping ship, most notably Rodgers' move to rival Transcontinental, which saw it leapfrog Quebecor as Canada's largest printer.

In January, Quebecor filed for Chapter 11 in the US and bankruptcy protection in Canada and has since been restructuring its operations across the globe, including the closure of its plant at Corby, Northants, as it attempts to return to profitability.

Quebecor's World of troubles continue

With Quebecor World suspending dividends on its preferred stock, the buzz around its financial troubles is becoming predictably more speculative and occasionally bizarre, with suggestions in a Reuters story

• that the value of the company's stock could conceivably plunge to zero;
• that Transcontinenental Inc., a major rival, would be a potential buyer of the book, directory and marketing businesses;
• that the Peladeau family might have to pay $6 or $7 a share to privatize the company (the stock yesterday had fallen to $2.45);
• that huge U.S. printer R.R. Donnelly might be a strategic buyer, but would have to sell other assets to get around regulatory hurdles

The giant printer is controlled by Quebecor Inc., also Quebec's largest publisher of consumer magazines. Quebecor owns 35% of Quebecor World shares and 84% of the votes. The company's stock has fallen 85% since February.

See earlier posts for background.

Another mag customer wants to bail from Quebecor World

The Economist magazine has applied to the courts to be allowed to give Quebecor World formal notice at the end of the month that it wants to terminate its printing contract with the troubled company, a division of Quebecor Inc.

According to a story in the Globe and Mail, the prestigious customer filed a motion in U.S. Bankruptcy Court in the Southern District of New York. Because Quebecor World is in Chapter 11 bankruptcy protection, there is a standstill on changes to any contracts. The company wants that stay lifted to allow notice to be given.

“The Economist is being harmed by the continuance of the automatic stay since the stay is all that prevents The Economist from exercising its undisputable contractual right to terminate the printing agreement by timely serving a written notice to terminate,” says the filing.

The Economist's move follows on the decision last month by Rogers Publishing to move printing of all of its consumer and trade magazines to Transcontinental Media at the end of next year.

Et tu, TVA? Quebecor World may lose its cousin magazines' business

Insult is added to injury for beleagured printer Quebecor World as it appears its parent company's magazine division may move some of its printing business to other suppliers. This, on top of the threat of losing the printing of The Economist, the loss of all of Rogers Publishing's magazines and the discontinuation of the 9 million press-run Canadian Tire catalogue.

According to a story in the Globe and Mail, Publications TVA Inc., Quebec's largest consumer magazine publisher, is considering entering into alternative printing arrangements.

"Publications TVA is assessing the possibility of letting a minority percentage [of its magazines] go to other printing companies, for practical and logistical reasons," [company spokesman] Luc Lavoie said.

Mr. Lavoie said no final decision has been made yet on whether to go with other printers for some titles and that the "vast majority" of the 50 or so magazines in the TVA stable will continue to be printed by Quebecor World. He would not provide further details.

Among titles of Outrement, Que.-based Publications TVA are several highly popular celebrity gossip magazines, including 7 Jours, Le Lundi and Star Système.

Quebecor World merges magazine, book and directory divisions

Quebecor World Inc. has merged its magazine, book and directory divisions into a single operating structure called the publishing services group. It's another step in QW's attempt to right itself after plunging to near bankruptcy. The company now has three divisions instead of six, following the earlier integration of retail insert, catalog, Sunday Magazine and direct divisions into the marketing solutions group and of the logistics and premedia divisions

Kevin J. Clarke will lead the new publishing services group. He was president of Quebecor World's book and directory publishing services group for the last 5 years.

Peladeau rides to rescue Sun papers

In the elliptical way that press releases sometimes employ to obscure rather than illuminate, Quebecor Inc. has announced that Pierre Karl Peladeau has been named Vice-Chairman and Chief Executive Officer of Quebecor Media, giving up his position as President and CEO of Quebecor World, the company's troubled printing operation. He is being replaced at Quebecor World by Wes Lucas.

This may be the case of dealing with the area of greatest need: Peladeau had seized the reins at Quebeor World because it was in serious trouble with a slump in sales and a real mess in Europe. It didn't appear that he had succeeded in this rescue, but now it seems he is more needed at the troubled Sun newspaper division, part of Quebecor Media. It would be interesting to know the inside story here.