UPDATE 1-Inmarsat takeover to clear last hurdle as hedge funds drop problem


FILE PHOTO: Technicians work on the Inmarsat S-Band/Hellas-Sat 3 satellite in the clean room facilities of the Thales Alenia Space plant in Cannes, France, February 3, 2017. REUTERS/Eric Gaillard/File Photo

LONDON (Reuters) – A private equity consortium’s $3.4 billion (2.65 billion pounds) takeover of British satellite company Inmarsat (ISA.L) looked likely to go ahead after a group of hedge funds dropped plans to challenge the sale at a hearing on Tuesday.

Their decision came after the buyers – British-based Apax Partners, U.S.-based Warburg Pincus and the Canada Pension Plan Investment Board (CPPIB) – said on Monday they would not increase or extend their offer.

Hedge funds Oaktree, Kite Lake and Rubric Capital wanted the judge to block the takeover because they said the price did not reflect the value of Inmarsat’s contract with Ligado, a U.S. broadband company that licenses some of the satellite group’s airwaves.

But Inmarsat’s buyer on Monday made its offer final and said it would not extend the Dec. 10 expiration date, in effect closing the window for the challengers to win any concessions.

“Having considered our position carefully, we now no longer intend to raise objections to the Scheme being sanctioned at the Hearing,” the hedge funds said on Tuesday.

Inmarsat’s shareholders decisively backed the takeover in May, with nearly 79% of shares voted in favour.

The hedge funds, led by Oaktree with a 2.85% stake, argued that Ligado could be on the cusp of modifying its licence from U.S. regulators, which could potentially trigger payments to Inmarsat.

The satellite company, which provides communications for aircraft, shipping and governments, said in November that the prospect and timing of any revenue or other value from its Ligado contract remained uncertain.

The climbdown by the hedge funds means the takeover undertaken with a scheme of arrangement is likely to be rubber stamped in the court meeting scheduled for Tuesday and Wednesday.

Reporting by Paul Sandle; editing by Kate Holton and Susan Fenton



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