Inmarsat Buyout Faces Fresh Opposition as Court Ruling Looms
- Most shareholders have approved takeover by group of funds
- Some minority investors say price may undervalue spectrum
By Nishant Kumar and Thomas Seal
21 November 2019
(Bloomberg) -- The $3.4 billion takeover of Inmarsat Plc faces one more hurdle next week when a U.K. court is expected to hear complaints from a group of minority shareholders.
Albert Bridge Capital LLP said Inmarsat investors risk being short-changed by the buyout consortium of private equity and pension funds as the deal doesn’t reflect the potential value of the satellite operator’s spectrum assets, in a letter seen by Bloomberg on Wednesday.
It follows similar complaints from shareholders Oaktree Capital Management, Rubric Capital Management LP and Kite Lake Capital Management. Albert Bridge says it owns 2.5 million shares, equivalent to about 0.5% of Inmarsat according to data compiled by Bloomberg.
The buyout by a group including Apax Partners, Warburg Pincus, Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan was approved by Inmarsat shareholders in May. The shareholder complaints focus on deferred payments to lease airwaves from Inmarsat by U.S. firm Ligado Networks LLC, which they say could add significantly to the company’s value.
“The current market cap of Inmarsat is approximately 2.6 billion pounds ($3.4 billion), and some sell-side analyst estimates believe that the present value of Ligado payments owed to Inmarsat could approach a significant portion of this figure again, alone,” Andrew Dickson, managing director at Albert Bridge Capital, wrote in the letter. A representative for Inmarsat declined to comment.
The company reiterated Wednesday that the agreed takeover already reflects the Ligado situation. Andrew Dickson and a representative for Albert Bridge Capital declined to comment.
The Federal Communications Commission is considering whether to allow Ligado to run a broadband network on airwaves long reserved for faint satellite signals. The U.S. DefenseDepartment asked the FCC on Wednesday to reject Ligado’s proposal to offer mobile broadband services, saying it could interfere with GPS - global positioning system devices.