Harbinger Takes New Approach to Acquire Inmarsat

[Satellite Today 07-25-08] The ownership saga of Inmarsat took another twist as Harbinger Capital Partners Funds said it intends to bid on Inmarsat and then combine it with SkyTerra Communications, the parent company of Mobile Satellite Ventures (MSV).
    “The combination of SkyTerra and Inmarsat would present an excellent opportunity to advance the realization of ubiquitous wireless coverage of the United States and Canada through an integrated satellite-terrestrial communications network,” Harbinger said in a July 25 statement.
    Harbinger also plans to provide MSV and SkyTerra an additional $500 million that will fund SkyTerra’s business plan through the 2010 third quarter.
"Obtaining this financing is a significant milestone for SkyTerra and MSV,” Alexander Good, SkyTerra’s chairman CEO and president said. "We have obtained committed financing for our period of greatest financial need — through the launch of our MSV-1 satellite to the time we expect to launch MSV-2.”
    SkyTerra and MSV also entered into an agreement with affiliates of Harbinger with respect to the possible combination of SkyTerra and Inmarsat.
"The combination of SkyTerra and Inmarsat, assuming financial terms can be reached, makes a great deal of strategic and operational sense,” Good said. “It would greatly enhance spectrum efficiency and North American L-band spectrum while providing a foundation for innovation in the global mobile satellite industry. Such innovation would include exciting new applications while preserving essential national defense, public safety, safety at sea and aeronautical safety services. The combination would also provide opportunities for greater efficiencies and scale benefits and coordination in the pursuit of next generation integrated satellite-terrestrial networks, products and applications.”
The moves come just four days after Inmarsat ended discussions with Harbinger in regard to a possible offer for Inmarsat.
    Harbinger is Inmarsat’s largest shareholder with a 28 percent stake and also holds 48 percent of MSV. Harbinger also has invested in TerreStar Corp., another company planning a hybrid satellite-terrestrial mobile system.
    “Inmarsat notes this morning’s announcement by Harbinger and SkyTerra regarding their current intention to make an offer for Inmarsat following the satisfactory outcome of a regulatory review,” Inmarsat said. “The board remains highly confident in Inmarsat’s standalone prospects. However, the board intends to maintain a constructive relationship with Harbinger and SkyTerra throughout the regulatory review process and will consider carefully any future offer that may maximize value for Inmarsat’s shareholders as a whole.”