Hedge Fund Harbinger Capital Sells Some Inmarsat (ISAT) ~ market folly

Tuesday, October 5, 2010

Hedge Fund Harbinger Capital Sells Some Inmarsat (ISAT)

Yesterday, Philip Falcone's hedge fund Harbinger Capital Partners announced its intention to sell 13% of its stake in Inmarsat plc (LON: ISAT), or 60,000,000 shares. A regulatory filing in the UK details that, "Harbinger hereby announces that it does not intend to make an offer to acquire the entire issued and to be issued share capital of Inmarsat not already held by Harbinger." It had long been thought that Falcone's fund would make a play for Inmarsat, but that is clearly not the case now. You'll recall that Harbinger has been building out a 4G network via LightSquared.

In the filing, Falcone also made a statement about Inmarsat saying, "Inmarsat has been a terrific investment for Harbinger and its investors. Although we have determined that we are not going to make an offer for all of the company, I remain a strong believer in the company's future and am extremely happy to maintain a core position in the company's stock and our partnership with Inmarsat through LightSquared Inc."

Per UK regulatory filings, Harbinger owns 14.1% of Inmarsat's outstanding shares as of October 5th, 2010 with 64,277,349 shares. This halves their prior stake of 28.76% owned back in March of 2009. Interestingly, the filing also notes that Harbinger's remaining shareholding will be "subject to a 180 day lock-up arrangement with Credit Suisse and UBS Investment Bank." Even though Falcone won't be pursuing the rest of the company, Harbinger's LightSquared has been working with Inmarsat on implementation of its spectrum co-operation plan for the 4G network.

In terms of other portfolio activity from Falcone's hedge fund, we've highlighted that Harbinger reduced its Tate & Lyle position (TATE). Also, the firm added to Crosstex Energy (XTXI) last month.

Taken from Google Finance, Inmarsat is "a provider of global mobile satellite communications services (MSS), providing data and voice connectivity to end users worldwide. The Company’s Inmarsat Global MSS segment is engaged in the supply of internally generated airtime, equipment and services to distribution partners and end users of mobile satellite communications by the Inmarsat business. Its Stratos segment is engaged in the supply of mobile and fixed-site remote telecommunications services, the provision of customized remote telecommunications solutions, value-added services, equipment and engineering services to end-users."

For more coverage of Harbinger's bet on 4G, Teri Buhl has an exclusive interview with Falcone and has also detailed Falcone's defense of his 4G plan.

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