(Adds court sanction for takeover scheme)
By Paul Sandle
LONDON, Dec 3 (Reuters) - A private equity consortium's $3.4
billion takeover of British satellite company Inmarsat
was approved at a court hearing on Tuesday after hedge fund
investors dropped a plan to challenge the value of the deal.
Activists Oaktree, Kite Lake and Rubric Capital wanted the
court to block the deal's "scheme of arrangement" because they
said the price did not reflect the value of Inmarsat's
longstanding agreement with U.S. broadband company Ligado.
Victory for the hedge funds would have sent shockwaves
through the M&A sector because scheme of arrangements are
usually rubber stamped by courts following shareholder approval.
Inmarsat's buyer - a consortium of UK-based Apax Partners,
U.S.-based Warburg Pincus and the Canada Pension Plan Investment
Board (CPPIB) - squared up to the hedge funds on Monday when it
made its offer final and said it would not extend the Dec. 10
expiration date, in effect closing the window for the
challengers to win any concessions.
The hedge funds wanted the judge to block the takeover
because they said the price did not reflect the future value of
Inmarsat's contract with Ligado, which licenses some of the
satellite group's airwaves but has struggled to create a viable
network.
"Having considered our position carefully, we now no longer
intend to raise objections to the Scheme being sanctioned at the
Hearing," the hedge funds said on Tuesday.
Inmarsat's shareholders decisively backed the takeover in
May, with nearly 79% of shares voted in favour.
The hedge funds, led by Oaktree with a 2.85% stake, argued
that Ligado could be on the cusp of modifying its licence from
U.S. regulators, which could potentially trigger payments to
Inmarsat.
But the satellite company, which provides communications for
aircraft, shipping and governments, said that the prospect and
timing of any revenue or other value from its Ligado contract
remained uncertain.
Its lawyer Michael Todd said Inmarsat had clearly
communicated to shareholders the board's uncertainty about
revenue from Ligado and about the prospect of the operator
modifying its license in the face of opposition.
He said the company's board of directors had clearly
discharged its duty to disclose information to shareholders
before they voted on the deal.
Inmarsat said the scheme remained conditional upon the
delivery of a copy of the Court Order to the Registrar of
Companies, which was expected to take place on Wednesday.
(Editing by Kate Holton, Susan Fenton and Alexandra Hudson)
