April 29, 2019 | Telecom | Europe | Ended

Inmarsat / Apax, Warburg Pincus, CPPIB, OTPP: Ligado Uncertainty and Optionality – Pre- or Post-Vote

The private equity-led bid for Inmarsat was triggered by a share price decline of 70% from highs three years ago, a subsequent cheap valuation, strong cash flow generation and optimistic growth at its aviation business. When the suitors considered upside scenarios from Inmarsat’s links with Ligado, the rationale for a takeover was clear, and a definitive offer for the company was presented on 25-Mar-19 from a financial consortium comprised of Apax, Warburg Pincus, the Canada Pension Plan Investment Board and the Ontario Teachers’ Pension Plan Board. In this report, we assess the impact of the Ligado catalyst, the uncertainties and opportunities before and after the 10-May-19 scheme vote, and our views on the feasibilities of a bump, CVR and counterbid. We explore which organisations and individuals can affect the now much-delayed FCC ruling on Ligado’s licence modification and possible scenarios that can make the investment risky or lucrative for the Inmarsat buyers and investors.

1. The Rationale for a Private Equity Bid 2. Ligado Networks and the Likelihood of FCC Approval 3. Process and Timing Details Related to the FCC Decision 4. Inmarsat Shareholder Pressure and Upside Through a CVR or Interloper 5. National Security and Antitrust Considerations 6. Break Price Analysis 7. Convertible Bond Considerations and Trading Recommendations 8. Deal Structure and Timing Appendix A. Satellite Communications Primer

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