Softbank-backed OneWeb increases offer for Intelsat
By Jessica DiNapoli NEW YORK (Reuters) - OneWeb, the U.S. satellite startup backed by Japan's SoftBank Group Corp, has increased its merger proposal for Intelsat SA by offering Intelsat's creditors a smaller discount for their bonds than it had before. OneWeb and Intelsat's merger has been stalled because Intelsat's debt investors have not been willing to accept the $3.6 billion haircut on their bonds the deal requires. OneWeb's new offer reduces the concessions Intelsat's bondholders must accept to about $2.85 billion. "We're at the absolute limit on what we're prepared [to offer] for this business, and we're simply not willing to negotiate any further," said Alok Sama, the chief financial officer of SoftBank, a telecommunications and technology conglomerate. In addition to allowing greater debt, the company bumped up the cash it is kicking into the deal by $60 million. SoftBank has already agreed to invest $1.7 billion in newly issued common and preferred shares in the combined company. Bondholders have until May 31 to decide whether to accept the new deal. After the initial proposal, some of Intelsat's debt traded above the offer price, in part leading investors to rebuff the deal. The new proposal gives holders a small premium to trading prices on Wednesday evening. The new offer also cuts how much Intelsat equity holders will receive, from $5 per share to $4.75. Since the initial deal, SoftBank has received inquiries from other firms interested in doing a deal if the Intelsat merger collapses, Sama said. "We have signed [non-disclosure agreements] with multiple parties," Sama said, adding he could not share the status of the discussions. "We've talked to other parties and have formulated a very clear view on what Intelsat is worth versus the other options." The value of the new deal is $14 billion, up from the initial $13.3 billion offer made in late February. A combined OneWeb and Intelsat would eventually create a combined network of hundreds or even thousands of satellites in high and low altitudes around Earth to help provide internet access worldwide. (Reporting by Jessica DiNapoli; Editing by Cynthia Osterman)
