Inmarsat Deal To Go Ahead As Shareholders Back Down Over Ligado Issue

(Alliance News) - Inmarsat PLC said Tuesday that dissenting shareholders attempting to hold its ...

Alliance News 3 December, 2019 | 8:54AM
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(Alliance News) - Inmarsat PLC said Tuesday that dissenting shareholders attempting to hold its GBP3.4 billion takeover from Connect Bidco Ltd no longer "intend to raise objections" to the sale.

Inmarsat in March agreed to a GBP3.4 billion takeover by Connect Bidco, a consortium including private equity firm Apax Partners LLP, Warburg Pincus International LLC, the Ontario Teachers' Pension Plan Board, and the Canada Pension Plan Investment Board.

In early November, however, Inmarsat shareholders Oaktree Capital Group LLC, Kite Lake Capital Management UK LLP and Rubric Capital Management LP urged Inmarsat to postpone the court sanction hearing to allow the US regulatory approval process for its Ligado spectrum assets to conclude.

Oaktree believed the takeover offer that Inmarsat recommended to its shareholders earlier this year ascribed no value to Ligado spectrum assets.

Ligado wants to use satellite frequencies which are near the GPS band for its terrestrial 5G networks but has struggled to get approval over concerns this may interfere with GPS receivers.

On Tuesday, the shareholders, in a statement, said: "As the funds made clear in both public and private communications to Inmarsat, our intention in relation to the hearing was not to prevent the scheme from being sanctioned by the court. We had sought that the court decline to sanction the scheme at the original scheme hearing date of November 12 (as adjourned), or for the court to adjourn the hearing. These requests were in order to create an opportunity for Inmarsat and the bidder to make revisions to the scheme to provide for value to be realised in relation to the contract Inmarsat has with Ligado, including the possibility of the introduction of a contingent value rights instrument for shareholders."

The new court sanction dates were set for Tuesday and Wednesday, which are set to go ahead.

"It is a matter of regret that despite the fact that our objections were raised in ample time for a further shareholders' meeting – or the introduction of a contingent value rights instrument – neither of these things have happened. However, we do now acknowledge the issue with either course being taken in light of the new statements the bidder has made yesterday," the disgruntled shareholders added.

On Monday, Connect Bidco made it clear that it will not raise its cash offer price or extend the long stop date for the acquisition.

Connect Bidco said it continued to be of the view that there was no change in the potential for Ligado to be able to make payments under its contract with Inmarsat.

The shareholders responded on Tuesday, saying: "Having considered our position carefully, we now no longer intend to raise objections to the scheme being sanctioned at the hearing."

Shares in Inmarsat were 0.8% higher in London on Tuesday morning at 544.40 pence each.

By Paul McGowan;

Copyright 2019 Alliance News Limited. All Rights Reserved.

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