Ontario Teachers in lead to buy Canadian satellite firm Telesat for $7 bn
10 April 2014
Ontario Teachers Pension Plan (OTPP) is in the lead to buy Loral Space & Communications Inc's Canadian satellite communications company Telesat Holdings Inc for about $7 billion including debt, Bloomberg today reported, citing people with knowledge of the matter.
OTPP could be offering more than $80 a share for Loral, whose stock closed at $70.08 yesterday in New York, giving it a market value of about $2.2 billion, the report said.
The deal would be done in two stages - buying publicly traded Loral, which owns 62.8 per cent of Telesat, and acquiring the rest from Canada's Public Sector Pension Investment Board, (PSP) which holds the remaining.
A buy-in of PSP would be crucial since although Loral holds a 62.8-per cent stake in Telesat, it has only 33.3 per cent of its voting stock, while PSP holds a 35.3 stake but 66.7 per cent of voting power.
Loral and PSP acquired Telesat in 2006 from Canadian telecommunications company BCE Inc., a $3 billion deal, including debt.
Reuters had earlier reported that private equity firm Apax Partners and the two Canadian pension funds have prevailed over others that were considering a deal, while The Carlyle Group, KKR & Co and Onex Corp have dropped out.
Ottawa-based Telesat is the world's fourth-largest provider of fixed satellite services, behind Intelsat Global SA, SES SA, and Eutelsat Communications SA.
Telesat provide satellite-delivered communications solutions worldwide to broadcast, telecom, corporate and government customers through its 14 satellites plus the Canadian payload on ViaSat-1 with another satellite under construction.
Telesat also manages the operations of 13 satellites for third parties.