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At Press Time: A Tale Of 2 Sales

By | August 16, 2004

      Affiliates of Kohlberg Kravis Roberts & Co. L.P., The Carlyle Group and Providence Equity Partners Inc. (KKR) appear to be looking to make a serious bid for Intelsat. The KKR group is in the unique position among the potential bidders of having an opportunity to roll Intelsat into PanAmSat [SPOT], another global satellite operator that the investment group is expected to buy officially this week.

      Other bidders, though, remain hotly in pursuit of Intelsat. The collaboration between KKR and its partners also could serve as an example that other would-be buyers may follow by teaming up themselves to make a winning bid rather than end up completely outside of a deal. According to reports, Intelsat board members are reviewing bids for their company. Estimates on what a buyer would need to pay to acquire Intelsat are in the $4.5 billion-plus range.

      KKR last week cleared its final regulatory hurdle in its acquisition of PanAmSat. The DirecTV Group, which is selling PanAmSat, reached an agreement with affiliates of the KKR investment group to cut the purchase price of the transaction due to a recent xenon ion propulsion failure of Galaxy 10R, an in-orbit PanAmSat satellite. Under the revised terms, DirecTV Group will receive $2.6 billion for its equity interest in PanAmSat, rather than the $2.8 billion originally agreed upon.

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