The Ontario Teachers’ Pension Plan had been in talks for months to buy satellite company Loral Space & Communications, and even had “handshake deal” in place.
But the talks have stalled, according to reports, because the pension fund “is so fed up” with the company’s founder that “they can’t see straight”.
From the New York Post:
Mark Rachesky’s $7 billion deal to sell satellite company Loral Space & Communications has been grounded, The Post has learned.
Talks between Loral and the Ontario Teachers’ Pension Plan, which were active in the fall, have ended, two sources close to the situation said.
In late October, Loral shares began a 15 percent rise, to $78.14, after reports had Ontario close to buying Loral from Rachesky’s MHR Fund Management.
Loral shares closed Friday at $78.32, up marginally.
Ontario had a handshake deal to buy Loral for roughly $85 a share, sources said, and the plan was to complete the deal once Loral settled a suit with ViaSat Inc. over patent infringement.
Loral on Dec. 2 announced a $45 million settlement.
Then Rachesky, a former protégé of Carl Icahn, failed to reach a deal with Ontario on who would pay the costs.
At the same time, Ontario found it was more expensive to raise financing for the deal to buy Rachesky’s 38 percent stake in Loral than it would have been in the fall.
“When the leveraged financing market stabilizes, the sides will be back putting it together,” a source said.
The pension is “so fed up with Rachesky they can’t see straight,” another source who believed it might take much longer for the sides to ever get back together said. Rachesky declined comment. Ontario did not return calls.
The Ontario Teachers’ Pension Plan manages $139 billion in assets.
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