WASHINGTON — British satellite operator Inmarsat delisted from the London Stock Exchange Dec. 5, completing a $3.3 billion buyout that some shareholders sought to delay.
The High Court of Justice in England and Wales approved the buyout by a private equity consortium Dec. 3, completing the last step Inmarsat needed for the deal to close.
Inmarsat, an operator of 14 geostationary communications satellites, now belongs to Connect Bidco, a consortium formed by Apax Partners in the U.K., Warburg Pincus in the U.S., and two Canadian pension firms.
Connect Bidco’s purchase closed almost a month later than anticipated due to resistance by three Inmarsat shareholders.
The holdouts, Oaktree Capital, Kite Lake Capital, and Rubric Capital, had asked the court to temporarily reject the buyout, arguing that Connect Bidco’s price did not reflect the value of Inmarsat’s spectrum lease agreement with Ligado.
Ligado, the firms said, appeared much closer to gaining approval from the U.S. Federal Communications Commission to create a 5G network, which could trigger $300 million in Ligado payments to Inmarsat spread across the remainder of this year and into 2020.
Ligado spectrum payments would then continue for 89 years, the firms said, increasing Inmarsat’s value.
Connect Bidco on Dec. 2 said Ligado’s inability to make such payments remains unchanged and that the consortium’s offer of $7.21 per share already constituted a “substantial premium” to Inmarsat’s share price prior to the merger offer.
Connect Bidco said it had been ready to complete the merger since November, and that it would not agree to a further extension to placate the dissenting firms.
Oaktree, Kite Lake and Rubric Capital issued a joint statement Dec. 3 withdrawing their objections to the merger.
The majority of Inmarsat’s shareholders — constituting 79% of the operator’s shares — approved the merger in May. Oaktree, Kite Lake and Rubric Capital collectively held 8.9% of Inmarsat shares.
Inmarsat is the third satellite operator to delist from public markets this year, following Hong Kong-based AsiaSat and London-based Avanti in September.
Inmarsat reported a loss of $89.1 million on $1.06 billion in revenue for the first nine months of the year. The company claimed $36.1 million in profits on $327.3 million in revenue for the months of July, August and September — it’s last public quarter before the buyout.
