Falcone’s LightSquared May Bid for TerreStar, DBSD
Philip A. Falcone
Brendan Smialowski/Bloomberg
Philip A. Falcone, senior managing director of Harbinger Capital Partners.
Philip A. Falcone, senior managing director of Harbinger Capital Partners. Photographer: Brendan Smialowski/Bloomberg
Feb. 4 (Bloomberg) -- Philip Falcone’s LightSquared wireless venture is considering bidding on satellite companies TerreStar Corp. and DBSD North America Inc., according to two people with knowledge of the company’s plans. Bloomberg's Julie Hyman reports. (Source: Bloomberg)
Philip Falcone’s LightSquared wireless venture is considering bidding on satellite companies TerreStar Corp. and DBSD North America Inc., according to two people with knowledge of the company’s plans.
The two companies’ spectrum holdings would help LightSquared handle wireless traffic as it prepares to roll out a nationwide fourth-generation network, said the people, who declined to be identified because the plans aren’t public. LightSquared is backed by Falcone’s Harbinger Capital Partners hedge fund.
LightSquared bids would set up a potential battle between Falcone and Charlie Ergen. Dish Network Corp., where Ergen is chief executive officer, said this week it reached agreement to buy DBSD for about $1 billion. DBSD, which filed for bankruptcy in May 2009, is a unit of Kirkland, Washington-based ICO Global Communications Ltd.
TerreStar, also in bankruptcy, has a confirmation hearing on March 4 for approval of a reorganization plan in which control may go to EchoStar Corp., where Ergen is chairman. TerreStar is also looking for an asset sale that would give creditors more money, and is proposing bonuses for its top executives if such a deal is reached.
A sale with an implied value of $1.22 billion would open a $6.5 million pool of bonuses and a sale with a value higher than $1.25 billion would bring them $8.3 million. A hearing for approval of the bonuses is set for Feb. 22.
Stocks Rise
EchoStar, based in Englewood, Colorado, and New York-based Harbinger are TerreStar’s largest shareholders, according to Bloomberg data.
TerreStar added 5 cents, or 40 percent, to 16 cents in over-the-counter trading, after touching 18 cents. ICO shares rose 3 cents, or 1.9 percent, to $1.64 at 4 p.m. New York time in Nasdaq Stock Market trading, after touching $1.80 earlier.
Under an agreement with the Federal Communications Commission, LightSquared is required to build a network that covers up to 100 million Americans by the end of 2012 and 260 million by 2016. The company plans to offer space on its network wholesale to retailers, computer manufacturers and consumer electronics makers, allowing companies such as Apple Inc. and Sony Corp. to sell their own wireless service in competition with existing providers.
LightSquared will use JPMorgan Chase & Co. as their bankers on the bid, said one of the people.
Tom Surface, a spokesman for Reston, Virginia-based LightSquared, declined to comment. Chris Fallon, a spokeswoman for Reston, Virginia-based TerreStar; Christopher Doherty, a spokesman for ICO; and Marc Lumpkin, a Dish spokesman, also declined comment.
To contact the reporter on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net.
To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net
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