Tags: Telesat | Buyers | deal

Telesat Said to Seek Buyers in Deal Valued at Up to $7 Billion

Friday, 19 Nov 2010 03:57 PM

Canadian satellite firm Telesat Holdings Inc. hired three financial advisers to help sell the company in a deal that may be valued at $6 billion to $7 billion, said three people with knowledge of the matter.

Closely held Telesat brought in JPMorgan Chase & Co., Morgan Stanley and Credit Suisse Group AG on Nov. 17 to start a formal sales process and offer so-called staple financing to interested buyers, said the people, who asked not to be identified because the talks are private.

While the auction hasn’t officially begun, Ottawa-based Telesat has been approached by Intelsat SA, the people said. Intelsat, owned by private-equity funds BC Partners Ltd. and Silver Lake, has hired Bank of America Corp. as an adviser and may name others to pursue a bid, one of the people said.

Telesat is co-owned by New York-based Loral Space & Communications Inc. and Canada’s Public Sector Pension Investment Board, and calls itself the fourth-largest satellite company in the world.

The sale may fetch 8.5 times to 9.5 times Telesat’s projected Ebitda of about $700 million next year, said one of the people. Telesat is being advised by JPMorgan, while Loral, a designer and maker of satellites, is working with Credit Suisse and the pension fund is being represented by Morgan Stanley.

Telesat’s Owners

Loral owns 64 percent of Telesat and has 33 percent of the voting rights. The Canadian pension board owns the remaining 36 percent and has majority voting control. They agreed to buy Telesat in late 2006 for C$3.25 billion and merged Loral’s satellite business into Telesat.

Wendy Lewis, a Loral spokeswoman, declined to comment on Telesat while saying that JPMorgan and Credit Suisse are acting as advisers on a possible spinoff or sale of Space Systems/Loral, Loral’s other major division.

Spokesmen for JPMorgan, Credit Suisse and Morgan Stanley didn’t return calls. Nick Mitsis, a spokesman for Luxembourg- based Intelsat, didn’t immediately return a phone call or respond to an e-mail. Bank of America couldn’t immediately be reached.

Many of the prospective buyers for Telesat are from outside Canada, raising the possibility of official opposition. On Nov. 3, Prime Minister Stephen Harper’s government blocked a $40 billion bid by Australia’s BHP Billiton Ltd. for Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer company.

Loral said Nov. 4 that Telesat’s board was exploring strategic options, including an initial public offering, and that a review also was under way for Space Systems/Loral.

Telesat had revenue of $593 million for the first nine months of 2010, according to Loral’s third-quarter earnings release, and earnings before interest, taxes, depreciation and amortization of $450 million.

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Canadian satellite firm Telesat Holdings Inc. hired three financial advisers to help sell the company in a deal that may be valued at $6 billion to $7 billion, said three people with knowledge of the matter.Closely held Telesat brought in JPMorgan Chase Co., Morgan...
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2010-57-19
Friday, 19 Nov 2010 03:57 PM
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