International Mobile Satellite (Inmarsat), the UK-headquartered satellite operator, remains the subject of private equity interest, with Apax Partners and Permira submitting an offer for the business valuing it at around £600m.
The company has rejected an offer from Apollo Advisors, leaving the Apax/Permira ticket as the sole option for an outright sale of the business, according to a report in the Financial Times.
A spokesperson for Inmarsat confirmed that a sale of the business was an option, adding that the company had not ruled out the possibility of an IPO. “Our priority is to ensure best value for shareholders in the company,” he said.
The company’s shareholder structure is one of the principal factors complicating a trade sale. Inmarsat’s largest shareholder Telenor, which holds a 15 per cent stake in the business, is under less pressure to sell than fellow shareholders Lockheed Martin, Deutsche Telekom and British Telecom, which are trying to reduce their respective debt burdens. Telenor is unlikely to accept an offer for the business which doesn’t fully reflect the company’s value.
Inmarsat yesterday published its full year results for 2002, which showed a five per cent increase in group revenues to $463m. The firm reported EBITDA of $314m, an eleven per cent increase on the previous year. Michael Storey, Inmarsat Ventures CEO, said he was pleased with the company’s results in what was “a difficult year for the satellite and telecommunications industry.”
Given the difficulties currently faced by companies seeking to obtain a stock market listing, a sale to private equity investors remains the most likely option to realise shareholder value. But Inmarsat maintains it is in no hurry to complete a deal. Private equity firms have steadily pursued satellite operators over the past twelve months, attracted by their steady cashflows.
Last month, French private equity house Eurazeo acquired France Telecom's 23 per cent stake in European satellite operator Eutelsat for just under E450m. In December, Italian private equity firm Investindustrial, formerly 21 Invest, teamed up with publishing group De Agostini to acquire a 10.9 per cent stake in Eutelsat from Deutsche Telekom for E210m. Also last year, a company majority-controlled by Lehman Brothers’ private equity division acquired Telecom Italia’s 20.5 per cent stake in the Eutelsat for $480m.
British Telecom is also thought to be planning to sell its 17 per cent stake in Eutelsat. Eutelsat’s other shareholders include many of Europe’s incumbent telecom operators, including, Belgacom, KPN, Russian Satellite Communications Company and Telekom Polska.