(Alliance News) - Connect Bidco Ltd, which is in the process of buying satellite communications company Inmarsat PLC, said Monday that it will not raise its cash offer price or extend the long stop date for the acquisition.
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 and Kite Lake Capital Management UK LLP 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.
Following these concerns, the court hearing was delayed to Tuesday and Wednesday, from Thursday and Friday last week.
In response to this, Connect Bidco said it continued to be of the view that there was no change in the potential for Ligado to be able to payments under its contract with Inmarsat.
"The cash value being offered by Bidco represents a substantial premium to the pre-offer share price of Inmarsat. Bidco can also confirm that in determining the cash value and making the offer, Bidco factored in various potential risks and opportunities in Inmarsat's business, including in relation to Ligado. Bidco continues to believe that the offer provides a compelling and deliverable opportunity for Inmarsat Shareholders to receive liquidity at this substantial premium," Connect Bidco stated.
As for the long stop date, Connect Bidco said a further delay would create an "unnecessary period of uncertainty" for Inmarsat's business and operations, would could affect its value.
In addition, Connect Bidco said it has already arranged its financing package for the acquisition for its completion before Tuesday next week, for which it has already incurred materials costs.
Delaying the acquisition further would add substantially to these costs, Bidco said.
Shares in Inmarsat were down 0.1% at 542.60 pence on Monday in London.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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