Hedge fund Harbinger Capital Partners has finally got the green light to privatise SkyTerra. Following a special meeting of shareholders on March 22, approximately 91% of SkyTerra’s stockholders approved the merger agreement which sees SkyTerra acquired…
Hedge fund Harbinger Capital Partners has finally got the green light to privatise SkyTerra. Following a special meeting of shareholders on March 22, approximately 91% of SkyTerra’s stockholders approved the merger agreement which sees SkyTerra acquired by new corporation formed and indirectly wholly-owned by Harbinger.
Under the terms of the agreement, the new corporation will pay US$5 in cash per share for each of SkyTerra’s outstanding shares of common stock not held by Harbinger or its affiliates. The purchase price represents a premium of approximately 56% over the average closing price of SkyTerra’s common stock for the 30 days ended September 22, 2009, the last day before the announcement of the proposed transaction.
The transaction is expected to close as soon as practicable, following the satisfaction of all the conditions to closing, including receipt of requisite FCC approval.
Prior to announcing the takeover agreement, Harbinger owned approximately 49% of the equity and 48% of the voting interests in SkyTerra. However, it also held warrants, connected to the US$500m securities purchase agreement that the two signed in mid-2008, which if exercised would give it over 77% of the voting interests in the satellite operator. Since the announcement the hedge fund has continued to exercise these warrants.