White House dragged into Inmarsat takeover battle

AN INTERVENTION by Donald Trump’s White House at a court showdown today could help to clinch Inmarsat’s £4.7bn bid to go private.

The US President’s administration has waded into a row that sits at the heart of the High Court case which will decide whether the sale of the British satellite telecommunications company can go ahead.

In an extraordinary bid to extract more cash from the buyers – a private equity consortium led by London-based Apax and New York-based Warburg Pincus – a small band of shareholders is fighting the company’s attempt to get final approval for the takeover. This is despite the deal securing the backing of investors and regulators. The group, led by Oaktree Capital, says a contract Inmarsat has with US firm Ligado is more valuable than has been disclosed.

It claims Ligado, which wants to use airwaves leased from Inmarsat to launch a wireless broadband network, is on the cusp of having its licence approved after years of delays.

That would deliver extra revenues to Inmarsat, one of the world’s leading mobile and satellite communication specialists, and boost the firm’s value, the shareholders argue.

But in evidence set to be put forward today and tomorrow, Inmarsat’s lawyers will instead argue that there is little prospect of that happening. The US

Secretary of Defense, Mark Esper, has also intervened in the case – to oppose Ligado’s plans over fears that it could disrupt the American military’s global positioning systems.

‘There are too many unknowns and the risks are far too great to federal operations to allow Ligado’s proposed system to proceed,’ Esper said in a letter earlier this month. ‘This could have a significant negative impact on military operations, both in peacetime and war. I therefore strongly oppose.’

The takeover deal has already been held up by scrutiny from the UK Government, which sought assurances that it would not affect Inmarsat’s work for the UK and US militaries.

Oaktree declined to comment.