On Wednesday, SkyTerra (OTCBB: SKYT) announced that it had entered into a definitive merger agreement with Philip Falcone’s Harbinger Capital Partners. The activist hedge fund manager is currently SkyTerra’s largest shareholder, controlling 49% of the company’s voting and non-voting stock. The deal is subject to shareholder approval, but since Harbinger Capital holds such a large stake, the company believes that the deal will go through as planned.
As part of the deal, Harbinger Capital will pay $5 per share for all shares outstanding that it does not currently own. The offer represents a 56% premium over the average closing price of SkyTerra’s common stock for the thirty days leading to the announcement. Following closure of the deal, a new company will be formed, which will be an indirectly wholly-owned subsidiary of the Harbinger’s Harbinger Capital Partners Master I and Harbinger Capital Partners Special Situations hedge funds.
According the company’s press release, it agreed to be acquired by Harbinger Capital only after a “thorough evaluation of SkyTerra's strategic alternatives by a special committee of SkyTerra's Board of Directors composed solely of independent directors. The special committee was assisted in its evaluation by its independent financial advisor, Morgan Stanley & Co., and counsel, Skadden, Arps, Slate, Meagher & Flom LLP.”
The transaction is expected to close in late 2009 or early next year. It is anticipated that the transaction will be consummated in late 2009 or early 2010.
SkyTerra is a leading developer and supplier of mobile satellite communications services. Since 1996 SkyTerra has been providing wireless voice, two-way radio and data services for a wide range of customers via its two existing MSAT satellites.
Harbinger Capital Partners LLC is a privately owned hedge fund manager that was founded by Philip Falcone in 2001. Before founding Harbinger, Mr. Falcone was the Head of High Yield trading for Barclay's Capital. |
