Otherwise known as Harbinger’s plan to sew a coast-to-coast US satellite communications network through the acquisition of SkyTerra Communications of the US and then Inmarsat, which is quoted in London and is a constituent of the FTSE 100.
Stale speculation? Consider these two extraordinary documents sitting on the SEC’s Edgar database — here and here.
This is a discussion of the deal produced by Harbinger’s advisers, UBS, complete with code-names and lots of numbers we would not have thought Harbinger was happy to see made public.
But the documents were knowingly filed with the US regulator – and so it seems a shame now not to share them with a wider audience.
Here’s some help deciphering…
Hortus, we believe, is the code name for Harbinger, Philip Falcone’s aggressive hedge operation.
Sol is assumed to be SkyTerra Communications, which Harbinger is in the process of taking private. Indeed, Falcone and co are awaiting a regulatory decision by the US Federal Communications Commission any day now.
Ignis, we think, is Inmarsat,where Harbinger also has a substantial stake – around 28 per cent. In fact Harbinger did announce as far back as last July that it would seek regulatory approval for a takeover of Inmarsat as well as Skyterra.
Yes, this is only a draft, so some key details — like bid price and financing arrangements — are but a string of asterisks. But still…
We’d assumed that strategic considerations like this would be considered confidential:
And this timeline would appear to tell us something very important: Harbinger is just approaching the moment when it expects an FCC decision on Inmarsat, not just Skyterra
One BIG caveat: The second (more recent) document, from September, discusses Sol but does not openly mention Ignis. Passages mentioning Ignis have been redacted – but you can find them by searching the doc for the codename (control F), highlighting the relevant area and changing the text colour. (Big hat tip Helen Thomas).
This produces intriguing passages like this:
Management could potentially cause issues with the transaction
? The Master Contribution and Support agreement restricts management from converting BCE non-voting stock and triggering issuance of Sol shares to Ignis under Shared Services Agreement
Transaction Certainty
? If executed without support of Special Committee through a “Pure Resources” public tender, 90% shareholder acceptance threshold for certainty
If executed with support of Special Committee through a merger, lower threshold for certainty– 50.1% vote if no “Majority of Minority” provision included (i.e. 100% certainty given Hortus ownership)
– 88% if “Majority of Minority” provision included
And, if you are not completely doc-ed out by now, consider this – Project Baseball. This is a presentation dated July 30 last year to SkyTerra executives, produced by Morgan Stanley. Things may have improved since, but last summer the outlook for this company was very poor indeed…
Just in case the document suddenly disappears from the SEC site, we’ve preserved copies here in the Long Room.
Neil Hume and Paul Murphy
Related links:
Project Veritas I - July
Project Veritas II – September
Project Baseball – July
Inmarsat open to approach – FT