Hedge funds drop objections to Inmarsat takeover
Inmarsat shareholders contesting a $3.4bn takeover of the satellite firm by private investors have dropped their objections ahead of a court hearing on Tuesday, the company said.
Hedge funds led by Oaktree Capital, which has a 2.85% stake, were planning to ask the High Court to block approval of the “scheme of arrangement”, part of the final steps in the takeover process, as they wanted a higher bid price.
A consortium of Apax Partners, Warburg Pincus, Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan Board on Monday ruled out an increase to its offer.
Oaktree, along with sector peers Kite Lake and Rubric claimed Inmarsat's wireless Ligado project in the US would increase its value.
The bid was accepted by the Inmarsat board in March and a majority of shareholders at a meeting in May.
Inmarsat's holding of US spectrum is leased to American company Ligado, which recently asked the US regulator, the Federal Communications Commission, to modify its licence and the way the airwaves can be used.
Oaktree is arguing that any change, which could include the development of a 5G network, could potentially trigger substantial payments to Inmarsat and so affects the value of the takeover.
However, Inmarsat said that while it was aware of the debate surrounding the potential license modification, it did not believe it justified delaying takeover proceedings.