Private Equity Gets Another Gift From the Heavens
Buyout firms are getting Inmarsat for a similar price to Charlie Ergen's rejected bid. The buyers seem to be on the better side of the deal.
A British satellite company can't be so picky about takeover offers now.
Photographer: -/AFPThe public market has again handed a present to private equity. A consortium of buyout firms and pension funds agreed on Monday to buy Inmarsat Plc for $3.4 billion, nine months after the board of the U.K. satellite group rejected a comparably priced offer from billionaire Charlie Ergen as too cheap. There’s been no colossal change in Inmarsat’s outlook since then. But the board’s view of the business is now taking second place to the need to give long-suffering shareholders a way out.
Inmarsat used to be a FTSE 100 stock, paying reliable dividends. More recently it has been plowing money into upgrading its maritime networks to broadband and providing high-speed internet for airplane passengers. Cash is going out of the business, but not to shareholders. Debt is rising, and investors have no idea when the situation will turn.