Hedge fund Harbinger makes multi-billion dollar bid for satellite operator Inmarsat

09 July 2008

Internationally famous satellite operator Inmarsat said on Monday that it had received a preliminary approach made on behalf of funds managed by Harbinger Capital Partners that may or may not lead to an offer. The news sent its shares rising the maximum in six months, effectively valuing the company at £2.41 billion ($4.75 billion).

The stock jumped as much as 10 per cent after Harbinger's admission ended months of speculation. Shares closed up 30 p, 6 per cent higher at 525p, adding almost £140 million to Inmarsat's market value. The shares have fallen 3.3 per cent this year.

Inmarsat received a ''very preliminary approach'' from Harbinger that ''may or may not lead to an offer,'' the London-based company said in a statement. Separately, Harbinger Capital Partners Funds confirmed the approach and said it is in the initial stages of assessing Inmarsat.

''No decision has been made regarding the merits or otherwise of a possible offer. Furthermore, a lengthy regulatory approval process would be required to effect an offer,'' it said, adding that a further announcement may be made if and when appropriate.

If it wanted to pursue a takeover, Harbinger would have to gain clearance from the Federal Communications Commission, the American industry watchdog that oversees the sector in a similar way to Ofcom in Britain.

This process could take up to 18 months. Banking sources suggested that Inmarsat might be able to apply to the UK Takeover Panel for an exemption, which would mean that it would not remain in an offer period for the entire time.