SES Sees Spacecom Bid Rejected

[Satellite News – 2-11-08] Israeli satellite operator Spacecom rejected a takeover bid by SES Global, Motty Slomovitz, Spacecom’s vice president of sales & marketing, North America, told Satellite News.
    “One of the reasons was the valuation was much lower than expected,” Slomovitz said. “There were also a lot of conditions that made it a difficult deal to do.”
    In a statement released to the Tel Aviv Stock Exchange late last week, Spacecom said it turned down SES’s bid due to the price involved, conditions of the deal as well as the potential separation of the company’s operations. “Concerning the company’s debts, including those related to Amos-3, and based on redemption of the company’s warrants at their face value only, SES’offer shows an asset value of the company’s purchased operations at only around $100 million (pre-tax) and not $160 million as SES wrote in its approach,” Spacecom said in a statement. “In the board of director’s opinion, this price does not reflect the company’s value without Amos-4.”
    SES had proposed to acquired Spacecom’s Amos-2, and Amos-3 satellite, which is slated to be launched later this year to replace Amos-1. But the Amos-4 satellite would not have been part of the deal.
    The separation of assets was a key factor in Spacecom’s rejection of the deal. “The company’s business plans, including that of Amos-4, are based on the continued operation of the company’s satellites,” the company said. “Separating the operations of Amos-2 and 3 will damage the development and growth of the company in the future, to the point of a risk to the ongoing concern of the company’s operations. Therefore, the board of directors does not feel it is correct to allow a deal that will create a separation in the company’s current operations that are integrated within each other.”
    Spacecom is publicly traded on the Tel Aviv stock exchange, and its major shareholders include IAI Eurocom, General Satellite Services Co. and Mer Services Group. Eurocom also has made a bid for Spacecom, but Spacecom’s board has made no recommendation. Eurocom wants to acquire a further 23 percent of the company’s shares and would then become the largest shareholder within the company.