[Satellite TODAY Insider 10-06-11] Independent global investment banking firm Greenhill & Co. (GHL) will sell all 9.8 million of its stock shares in mobile satellite operator Iridium Communications during a two-year time frame, Greenhill CEO Scott Bok confirmed Oct. 4.

   GHL is Iridium’s second-largest shareholder. In a statement, Bok said that while his firm strongly believes in the value of Iridium, “we made the decision to sell stake in Iridium primarily to fund the repurchase of our own attractively valued common stock.”

   Raymond James Analyst Chris Quilty told Satellite TODAY Insider that many investors viewed Greenhill’s position in Iridium stock as an unwanted overhang due to the uncertainty regarding the timing, scale and method of any future stock sales. “Shares of GHL have recently declined by about 68 percent. By defining its exit plan, Greenhill has significantly mitigated the overhang risk for new Iridium investors.”

   While the loss of a major shareholder could be seen as a major disappointment for the operator, Quilty noted that the announcement does have some positive ramifications for Iridium. “First, it is no secret that Greenhill, which is a boutique investment bank and not an investment company, was eager to liquidate its Iridium investment at the earliest opportune time. Second, Greenhill’s decision to sell its Iridium stock over a two-year time frame should ensure minimal disruption to Iridium’s normal trading patterns and further supports Greenhill’s implied statement that shares of Iridium are undervalued.”

   Quilty explained that Greenhill could have maximized its own shareholder value by immediately selling its entire Iridium stock and using all of the proceeds to immediately buy back shares of GHL.

   “In summary, we believe the elimination of GHL’s concentrated position should be viewed as a long-term positive for the stock. Any selling pressure related to this announcement would represent an excellent buying opportunity coming into the company’s third quarter earnings report, which we, once again, expect to demonstrate strong underlying growth trends,” Quilty said.

CORRECTION – An earlier version of this story attributed a quote to Raymond James analyst Chris Quilty when it should have attributed the quote to a Raymond James risk analysis report issued Oct. 4.