PE Firm Pushing for Inmarsat/Skyterra Combo

Harbinger Capital today offered satellite service provider MSV/Skyterra $500 million to pay for the company’s launch of its two new satellites. The private equity firm also made clear it’s planning to push for a deal to acquire British satellite company Inmarsat. The acquisition attempt isn’t welcomed by Inmarsat, but Harbinger owns 28.8 percent of its stock, which means Inmarsat will have a tough time keeping Harbinger and the Skyterra deal at bay.

We started to anticipate such mergers back in March after looking at the number of players trying to make it in the difficult satellite services business, as well as the likelihood of U.S. regulators approving the Sirius-XM merger, which took another step further yesterday. Harbinger is apparently confident that the FCC will look favorably on its attempt to provide a 4G satellite and terrestrial network, too.

The combination of Skyterra and Inmarsat makes sense because they both own complimentary spectrum and satellites that work in the L band. According to the Skyterra press release, regulatory approvals for any deal would take between a year to 18 months to complete, which means the $500 million in cash is needed to keep the company — and its birds — afloat in the meantime.

Harbinger could be eyeing other deals as well. The firm has a large ownership stake in TerreStar, which owns spectrum in the same band owned by EchoStar. TerreStar is leasing spectrum from Echostar are already sharing spectrum, so closer ties between those two are likely coming.

photo from NASA

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