Israel’s Spacecom Weighs Takeover Offer from SES

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PARIS — Israeli satellite-fleet operator Spacecom is expected to decide within weeks whether to pursue a takeover bid made by SES of Luxembourg, whose SES New Skies division is seeking to bolster its capacity over the Middle East and Africa, according to the two companies.

Spacecom operates two satellites, Amos-1 and Amos-2, at 4 degrees west longitude, a position that can connect the United States to the Middle East. The Amos-3 satellite, built by Spacecom shareholder Israel Aerospace Industries (IAI), is scheduled for launch this spring and will replace the retiring Amos-1 at the 4 degree slot.

In partnership with the Israeli government, Spacecom ordered an Amos-4 spacecraft in July, saying it would be launched in 2012 into an orbital position somewhere between 64 degrees east and 76 degrees east longitude for better coverage of Southeast Asia and Central Asia.

Spacecom said the IAI-built Amos-4 will cost $365 million, including launch. In return for the use of much of the capacity on the satellite during its planned 12-year life, the Israeli government is paying $265 million of this amount. Spacecom is paying $100 million, with no payment due until 2010. Spacecom said it would have the equivalent of eight high-power Ku-band transponders and four Ka-band transponders on Amos-4 for its own use.

It remains unclear whether SES has included Amos-4 in its takeover bid or instead would transfer ownership of that spacecraft to the Israeli government, allowing SES to develop Spacecom’s other orbital slots. Also unclear is whether SES sounded out the Israeli government on its reaction to a Spacecom purchase before making its bid. SES officials have said they are unlikely to bid for companies unless SES could assure itself of a controlling stake.

The SES bid was disclosed by Spacecom in a Jan. 23 filing to the Tel Aviv Stock Exchange, where Spacecom shares are traded. Spacecom said its board would review the SES offer. Company officials declined to comment otherwise.

In a Jan. 25 statement, SES said: “SES confirms that it has made a non binding offer to acquire Space Communications Ltd. This offer is currently being reviewed by Spacecom and may or may not lead to a transaction. Comments on the specifics of the offer cannot be made at this time. Further information will be published in due course.”

In addition to IAI, which has a 20.5 percent share, Spacecom’s other major shareholders include C. Mer Industries Ltd. of Israel, with 18.6 percent; and Eurocom Group, an Israel investment group, which owns 22.8 percent. About 10.5 percent of its equity is traded publicly, according to filings with the Tel Aviv Stock Exchange. The company’s market capitalization was listed at 582.8 million Israeli shekels ($154.3 million) as of Jan. 24.

Spacecom reported 2007 revenue of $56 million and said its two operating satellites were 90 percent full.