Tag: satellite company

Ontario Teachers’ Pension No Longer In Talks to Buy Satellite Company

satellites

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.

 

Photo by  Jeton Bajrami via Flickr CC License

Canada Pension Funds In Talks To Buy Satellite Company

Canada blank mapCanada’s Public Sector Pension Investment Board and the Ontario Teachers’ Pension Plan are putting together a $7 billion deal to acquire Canadian satellite company Telesat Holdings Inc.

When all is said and done, each pension fund will have a 50 percent stake in the company.

More from Businessweek:

Under the terms being discussed, the funds will acquire Loral Space & Communications Inc. (LORL:US), a publicly traded shell company that owns 63 percent of Telesat, for about $85 a share (LORL:US), or $2.6 billion, said the people, who asked not to be named discussing private information. While a deal could be announced next month, talks may fall apart again given the parties’ inability to reach an agreement in the past, the people said.

The pension funds are planning to wind up with equal ownership and voting stakes in Telesat, the people said. PSP, which currently holds about 67 percent of the voting rights and 37 percent of the equity in Telesat, would increase its ownership to 50 percent and reduce its voting rights, while Ontario Teachers’ would control the other half of the company.

Telesat has been on and off the block for years. Loral and PSP, which already owns 37 percent of Telesat, called off a sale effort in 2011, after offers from bidders including EchoStar Corp. and Carlyle Group LP fell short of expectations. Talks started again this year before stalling in June because Mark Rachesky, Loral’s largest shareholder, couldn’t agree with PSP on a price to sell the company, failing to bridge an equity gap of about $100 million, people said then.

Three-way talks between Loral, PSP and Ontario Teachers’ restarted last month after Ontario Teachers’ and PSP raised their offer, the people said, leading to renewed negotiations.

The Public Sector Pension Investment Board manages about $97 billion in assets. The Ontario Teachers’ Pension Plan manages $138 billion in assets.