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Inmarsat rejects call to halt takeover proceedings
5th Nov 2019 13:57
(Sharecast News) - British satellite maker Inmarsat has rejected a call from one its biggest shareholders to delay its $3.4bn takeover.
Inmarsat is being acquired by private equity firms Apax and Warburg Pincus in a recommended cash offer.
The takeover court hearing is scheduled for 12 November, but Oaktree Capital Management - which has a 2.85% stake - has called on Inmarsat to delay it until there is more clarity surrounding the company's US spectrum holdings.
The spectrum is leased to American company Ligado, which recently asked the US regulator, the Federal Communications Commission, to modify its licence and the way the airwaves can be used. Oaktree is arguing that any change could potentially trigger substantial payments to Inmarsat and so affects the value of the takeover.
However, Inmarsat said that while it was aware of the debate surrounding the potential license modification, it did not believe it justified delaying takeover proceedings.
In a statement, the company said: "The board is mindful of its fiduciary duties and continues to monitor any developments regarding Ligado.
"In that context, the board and its financial advisors have continued to properly assess, amongst other matters, the timing and prospect of revenue or other value to be received by Inmarsat pursuant to the cooperation agreement between Inmarsat and Ligado and in the board's view, these remain uncertain.
"The board considers there has been no material change since it recommended the acquisition and therefore intends to maintain the scheme sanction hearing."
Inmarsat is being acquired by private equity firms Apax and Warburg Pincus in a recommended cash offer.
The takeover court hearing is scheduled for 12 November, but Oaktree Capital Management - which has a 2.85% stake - has called on Inmarsat to delay it until there is more clarity surrounding the company's US spectrum holdings.
The spectrum is leased to American company Ligado, which recently asked the US regulator, the Federal Communications Commission, to modify its licence and the way the airwaves can be used. Oaktree is arguing that any change could potentially trigger substantial payments to Inmarsat and so affects the value of the takeover.
However, Inmarsat said that while it was aware of the debate surrounding the potential license modification, it did not believe it justified delaying takeover proceedings.
In a statement, the company said: "The board is mindful of its fiduciary duties and continues to monitor any developments regarding Ligado.
"In that context, the board and its financial advisors have continued to properly assess, amongst other matters, the timing and prospect of revenue or other value to be received by Inmarsat pursuant to the cooperation agreement between Inmarsat and Ligado and in the board's view, these remain uncertain.
"The board considers there has been no material change since it recommended the acquisition and therefore intends to maintain the scheme sanction hearing."