25th Jul 2008 07:00
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS IN THAT JURISDICTION.
Proposed offer by the Harbinger Capital Partners Funds and SkyTerra Communications, Inc. for Inmarsat plc
The board of SkyTerra Communications, Inc. ("SkyTerra") and the management of SkyTerra's largest shareholders, the Harbinger Capital Partners Funds ("Harbinger" and together with SkyTerra, the "Potential Offeror"), today announce their intention to make an offer to acquire the entire issued and to be issued share capital of Inmarsat plc ("Inmarsat") not already held by the Potential Offeror (the "Proposed Offer") on terms to be announced following a satisfactory outcome to the Regulatory Approvals process.
The Proposed Offer
On 7 July 2008, Harbinger confirmed that it had made a preliminary approach to Inmarsat in relation to a possible offer for the entire issued and to be issued share capital of Inmarsat not already held by the Potential Offeror. Discussions took place between Harbinger and Inmarsat and their respective advisers and these discussions focussed upon the lengthy regulatory and competition approval process required to effect an offer for Inmarsat. In light of the lengthy process (as further described below) Harbinger did not consider it appropriate to make a firm offer for Inmarsat at that stage and therefore Harbinger and Inmarsat separately announced on 21 July 2008 that they had agreed to suspend discussions in relation to a possible offer.
Today the Potential Offeror is announcing a proposed offer for Inmarsat and assuming an acceptable conclusion to the Regulatory Approvals process, the Potential Offeror intends to enter into negotiations with the board of Inmarsat regarding the terms of an offer and endeavour to seek the recommendation of the Inmarsat board at that time.
The Potential Offeror strongly believes that the combination of SkyTerra and Inmarsat would present an excellent opportunity to advance the realisation of ubiquitous wireless coverage of the United States and Canada through an integrated satellite-terrestrial communications network.
Regulatory Process
A number of Regulatory Approvals will need to be obtained in respect of the Proposed Offer, including approval from the U.S. Federal Communications Commission. The Potential Offeror expects that it will take approximately 12 to 18 months to obtain all of the Regulatory Approvals - a period which significantly exceeds a normal offer period. Therefore, prior to any offer being made by the Potential Offeror for Inmarsat, the Potential Offeror will seek to obtain the principal required consents, including those which are expected to take the longest to obtain. Further details of the Regulatory Approvals are set out in the section below entitled 'Regulatory Approvals and Timetable'.
There is no certainty that the Regulatory Approvals will be obtained, or that they will be obtained on terms satisfactory to the Potential Offeror.
Terms of Proposed Offer
As a result of the uncertainty in relation to the Regulatory Approvals it is not the intention of the Potential Offeror to announce the formal terms or structure of any offer at this stage.
Effect of this Announcement
This announcement does not constitute an announcement of a firm intention to make an offer under Rule 2.5 of the Code and therefore there can be no certainty that any offer will be made, even if all of the Regulatory Approvals are obtained on terms satisfactory to the Potential Offeror, or that if an offer were made for Inmarsat that it would be successful.
The content of this announcement has been agreed with the UK Panel on Takeovers and Mergers and in view of the anticipated length of the Regulatory Approvals process this announcement ends the current offer period for the purposes of the Code. Both the Potential Offeror and Inmarsat have accepted this ruling. As a consequence, inter alia, Rule 8 of the Code does not apply to Inmarsat and/or the Potential Offeror, and as an offer is not imminent, Rule 21 of the Code does not apply either.
Information on SkyTerra
Harbinger, together with an affiliate, currently owns 48.43% of SkyTerra's issued and outstanding voting shares, and has the right, subject to FCC and other applicable U.S. approvals, to own 60.90% of SkyTerra's voting shares. If the Proposed Offer is successful then Harbinger's interest in the issued and outstanding voting shares of SkyTerra will be further increased upon the transfer to SkyTerra of Harbinger's current holding of Inmarsat Shares and Inmarsat Convertible Bonds, as referred to in the section below entitled 'Information on the Harbinger Capital Partners Funds'.
SkyTerra is the parent company of Mobile Satellite Ventures LP ("MSV"), which along with its Canadian joint venture partner Mobile Satellite Ventures (Canada) Inc. ("MSV Canada") delivers mobile wireless voice and data services primarily for public safety, security, fleet management and asset tracking in the United States and Canada. MSV and MSV Canada are developing an integrated satellite-terrestrial communications network, which they expect will provide seamless, transparent and ubiquitous wireless coverage of the United States and Canada to consumer handsets. MSV holds the first FCC licence to provide integrated satellite-terrestrial services. MSV and MSV Canada plan to launch two satellites for coverage of the United States and Canada, which are expected to be among the largest and most powerful commercial satellites ever built. When completed, the network is expected to support communications in a variety of areas including public safety, homeland security, aviation, transportation and entertainment, by providing a platform for interoperable, user-friendly and feature-rich voice and high-speed data services.
Information on the Harbinger Capital Partners Funds
Founded in 2001 by Philip A. Falcone and Harbert Management Corporation, the Harbinger Capital Partners Funds, managed out of offices in New York, have grown to be one of the 15 largest hedge funds, by assets, in the United States. The Harbinger Capital Partners Funds' mission is to achieve superior returns through investments in various asset classes, special situations and private loans and notes. The Harbinger Capital Partners Funds may also make strategic investments, controlling or otherwise, when they see development and value creation opportunities. The firm consists of a team of investment professionals who seek to develop investment opportunities through analytical rigour coupled with a contrarian viewpoint. As of 1 July 2008, the Harbinger Capital Partners Funds had over $26.0 billion in assets under management and committed capital. Harbinger currently holds 132,041,000 Inmarsat Shares and Inmarsat Convertible Bonds having an aggregate principal amount of $37,600,000 which, if the Proposed Offer is successful, it will transfer to SkyTerra in return for newly issued shares in SkyTerra.
Information on Inmarsat
Inmarsat is a leading provider of global mobile satellite communications. Inmarsat provides voice and high-speed data services to almost anywhere on the planet on land, at sea and in the air. Its services are delivered through one of the most versatile and reliable satellite networks in the world. Inmarsat owns and operates 10 satellites in geostationary orbit 35,786km above the Earth, controlled from its HQ in London via ground stations located around the globe. Inmarsat works to develop innovative, customised solutions for businesses and organisations all over the world. These include major corporations from the maritime, media, oil and gas, construction and aeronautical industries, as well as governments and aid agencies. Inmarsat is relied upon for mission-critical mobile communications and is a trusted and integral part of its customers' global operations.
Reasons for the Proposed Offer
With its global satellite fleet and complementary plans for next generation satellites, Inmarsat offers a compelling strategic fit with SkyTerra, and its subsidiary MSV. MSV, together with MSV Canada, is developing an integrated satellite-terrestrial communications network to provide seamless, transparent and ubiquitous wireless coverage of the United States and Canada to consumer handsets. In an effort to realise additional value embedded in the combination of both companies' radio spectrum, MSV and Inmarsat recently signed a cooperation agreement for L-Band operations in North America. The Proposed Offer would allow MSV and Inmarsat to increase substantially the scope of their existing cooperation, further enhancing spectrum efficiency to support the development of an integrated satellite-terrestrial communications network in North America, based on MSV's patented ancillary terrestrial component technology.
Regulatory Approvals and Timetable
In order to effect the Proposed Offer it will be necessary for the Potential Offeror to obtain the following Regulatory Approvals: (i) approval of the FCC for transfer of control of the FCC licences held by MSV LLC and Inmarsat; (ii) FCC approval to increase Harbinger's "foreign" ownership of SkyTerra up to 100%; (iii) FCC approval for transfer of control of the TVCC Lease which relates to the control of the 1.6 Spectrum, which is subject to an option agreement; (iv) HSR Act clearance by the DoJ and the FTC for acquisition of Inmarsat voting securities; (v) European Commission or national Member State antitrust approval for acquisition of Inmarsat; and (vi) such other antitrust, regulatory and governmental approvals that the Potential Offeror identifies that it considers necessary in order to be able to effect the Proposed Offer.
The Potential Offeror expects that each of the FCC and DoJ will undertake a substantive review of the consequence of the Proposed Offer and therefore it is likely to take approximately 12 to 18 months for the Potential Offeror to obtain those Regulatory Approvals. Given the time needed to obtain those Regulatory Approvals, the Potential Offeror intends to obtain a number of the required consents prior to any firm offer being made by the Potential Offeror for Inmarsat.
In a number of jurisdictions where Regulatory Approvals may be necessary or desirable, the relevant satellite, antitrust and/or governmental authorities may not permit filings on the basis of this announcement. It is the Potential Offeror's expectation that such approvals can either be obtained within the normal offer timetable or would not impede the Potential Offeror's ability to complete the acquisition of Inmarsat.
Assuming an acceptable conclusion to the Regulatory Approvals process, the Potential Offeror intends to enter into negotiations with the board of Inmarsat regarding the terms of an offer and endeavour to seek the recommendation of the Inmarsat board.
The Potential Offeror expects that any offer, if made, would be made to shareholders of Inmarsat in the second half of 2009 and that such an offer would be completed as quickly as possible thereafter.
A further announcement may be made, if and when appropriate.
General
For further information, please contact:
Merrill Lynch InternationalTel: +44 (0)20 7628 1000
Richard TaylorPhilip Noblet
Tulchan Communications Tel: +44 (0)20 7353 4200
Andrew Grant Andrew Honnor
This announcement does not constitute an offer or invitation to purchase any securities. The release, distribution or publication of this announcement in jurisdictions other than the UK may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the UK should inform themselves about and observe any applicable requirements.
Merrill Lynch International is acting only for Harbinger and no-one else in connection with the Proposed Offer and will not regard any other person as its client or be responsible to any person other than Harbinger for providing the protections afforded to clients of Merrill Lynch International nor for giving advice in relation to the Proposed Offer.
This announcement does not constitute, or form part of, any offer for, or any solicitation of any offer for, or any offer to sell securities in any jurisdiction nor does it constitute a prospectus or prospectus equivalent document.
This announcement ends the offer period for the purpose of the Code and therefore Rule 8 does not apply to the Potential Offeror and/or Inmarsat.
Statement under the U.S. Private Securities Litigation Reform Act of 1995
This announcement may contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, with respect to plans described in this news release. Such statements generally include words such as could, can, anticipate, believe, expect, seek, pursue, proposed, potential and similar words. Such forward-looking statements are subject to uncertainties relating to the receipt of regulatory and competition approvals, the cooperation and support of Inmarsat with respect to the Proposed Offer, the ability of the Potential Offeror to raise the financing required for the Proposed Offer and the ability of the Potential Offeror to consummate the Proposed Offer. The Potential Offeror assumes no obligation to update or supplement such forward-looking statements.
Appendix
Definitions
"1.6 Spectrum" means the 5MHz of nationwide (U.S.), contiguous unpaired spectrum from 1670-1675 MHz controlled by TVCC
"Code" means the UK City Code on Takeovers and Mergers
"DoJ" means the U.S. Department of Justice
"FCC" means the U.S. Federal Communications Commission
"FTC" means the U.S. Federal Trade Commission
"Harbinger" means Harbinger Capital Partners Master Fund I Ltd and Harbinger Capital Partners Special Situations Fund, LP, being together the Harbinger Capital Partners Funds
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
"Inmarsat" means Inmarsat plc
"Inmarsat Convertible Bonds" means $287,700,000 1.75% convertible bonds due 2017 issued by Inmarsat
"Inmarsat Shares" means the ordinary shares of €0.0005 each in the capital of Inmarsat
"MSV" means Mobile Satellite Ventures LP, a Delaware Limited partnership
"MSV LLC" means Mobile Satellite Ventures Subsidiary LLC, a Delaware limited liability corporation and wholly owned subsidiary of MSV
"Regulatory Approvals" has the meaning given to it in the section entitled "Regulatory Approvals and Timetable"
"SkyTerra" means SkyTerra Communications, Inc
"TVCC" means TVCC Holding Company, LLC, a Delaware limited liability company
"TVCC Lease" means the Long-Term De Facto Transfer Lease Agreement, dated 23 July 2007, between an affiliate of TVCC and OP LLC
Related Shares:
Inmarsat