US-based investment banking firm Greenhill & Co is to gradually sell its entire 14% stake in MSS operator Iridium over around two years to support the repurchase of its own stock.
In an SEC filing on 4 October, Iridium stated that Greenhill will sell…
US-based investment banking firm Greenhill & Co is to gradually sell its entire 14% stake in MSS operator Iridium over around two years to support the repurchase of its own stock.
In an SEC filing on 4 October, Iridium stated that Greenhill will sell all of its 9,804,016 shares under a 10b5-1 sales plan, which is designed to sell them steadily to minimise the impact on the operator’s trading.
The plan commenced on 3 October, and sees the firm sell stock in daily increments of between 15,000 and 25,000 shares depending on price fluctuations, except in the last five trading days of any quarter when none will be sold.
“We appreciate that Greenhill is selling its stake in Iridium in a measured and thoughtful way, with a view to minimizing the potential impact of their share sales on our day-to-day trading activity,” said Iridium CEO Matt Desch.
Greenhill acquired the stake through special purpose acquisition company GHL Acquisition, later renamed Iridium Communications Inc, which acquired the group in late 2009 in a deal worth around US$517.3m.
Following the transaction, Greenhill CEO Scott Bok joined Iridium’s board and also took a personal stake in the group.
Desch added that Bok will continue to be a “significant stockholder personally and serve as a member of our board”.
An Iridium spokeswoman said Bok currently holds 1.5% of Iridium’s total shares, and chairs its nominating and corporate governance committee.
She declined to disclose details of other parties that invested in the SPAC that subsequently acquired Iridium shares, but described Greenhill as the vehicle’s “primary player”. In the SEC filing, Bok said: “We continue to believe strongly in the value of Iridium as a global communications company.
“We’ve made the decision today to sell our stake in Iridium primarily to fund the repurchase of Greenhill’s own attractively valued common stock, and we believe that implementing a long-term 10b5-1 plan will allow us to participate in the full value of Iridium being reflected in its share price over time.”
The group joins several other US investment firms to have recently announced plans to buy back their own shares as a result of weakening financial markets, including Berkshire Hathaway and Jefferies.
Greenhill’s stock, which has lost around 64% of its value in the past year, was trading at around US$31 per share while going to press. Iridium was trading at around US$6 per share, representing a loss of about a third in the past year.
