Private equity firm Centerbridge Partners has withdrawn its proposed US$5bn bid for LightSquared less than a week after the plan had been revealed.
In a statement to the bankruptcy court, Kirkland & Ellis lawyer Paul Basta, who is representing the…
Private equity firm Centerbridge Partners has withdrawn its proposed US$5bn bid for LightSquared less than a week after the plan had been revealed.
In a statement to the bankruptcy court, Kirkland & Ellis lawyer Paul Basta, who is representing the committee overseeing LightSquared’s operations, said that for both “economic and non-economic reasons”, Centerbridge has determined not to proceed.
LightSquared added that it was continuing to pursue negotiations with Centerbridge with the view to potentially changing the structure of the transaction.
On 12 December, LightSquared revealed that Centerbridge Partners had made a US$5bn bid, US$3.3bn for the equity and US$1.7bn in various liabilities, for the company.
The announcement meant that the auction of LightSquared’s assets was subsequently put on hold first until 16 December and then until 19 December.
The change of heart by Centerbridge means that Dish remains in pole position to acquire the satellite/terrestrial venture with its original stalking horse bid of US$3.8bn, including liabilities.
This will be to the chagrin of Harbinger Capital Partners, the Philip Falcone-controlled hedge fund that is LightSquared’s majority shareholder. Dish’s offer would wipe out Harbinger’s equity whereas it is understood that Centerbridge’s bid would have seen the group remain as a minority investor.
However, unlike Dish’s deal, Centerbridge’s plan was dependent on LightSquared getting regulatory permission to deploy LTE services with its spectrum. It was also for the entire company, while Dish is focussing on a subsidiary that excludes 5 MHz of leased spectrum.
