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August 30, 2005
By Vivek Shankar and Benedikt Kammel
San Francisco - Intelsat agreed to buy PanAmSat Holding for $3.2 billion (R20.7 billion) in cash to form the world's largest commercial satellite operator and gain broadcasting customers including Time Warner's CNN.
Intelsat, owned by four private equity firms including Apollo Management, will pay $25 a share for PanAmSat, the world's largest distributor of satellite-based television channels.
That is a 26 percent premium to PanAmSat's closing price of $19.80 last Friday in New York Stock Exchange composite trading. Intelsat said yesterday it would assume $3.2 billion of PanAmSat's debt.
Satellite operators including Intelsat and Luxembourg-based SES Global are seeking to cut costs and win more broadcasting customers as demand for advanced services such as high-definition TV and broadband internet increases.
The value of mergers involving satellite telecommunications companies tripled last year to $13.9 billion, according to data compiled by Bloomberg.
"Eliminating a competitor should be good for the pricing environment of the entire industry, and Intelsat can run their satellites more efficiently than before," said Thijs Berkelder, an analyst at Petercam, a Belgian brokerage.
"You can expect much more consolidation to take place."
Berkelder recommends that investors buy SES Global shares.
The combined company's sales would top $1.9 billion this year. The purchase is subject to regulatory approval. PanAmSat reported sales of $827.1 million in 2004.
Intelsat will increase the number of satellites it has to 53 from 28, offering coverage in more than 220 countries.
SES Global, the world's largest satellite broadcaster, operates 35 satellites.
PanAmSat this month said it planned to launch one and a half satellites a year on average to replace and upgrade its fleet.
Last month, it bought a satellite and two orbital slots from France's Alcatel to expand in the Middle East, Africa and Asia.
Berkelder of Petercam estimates that of about 270 commercial satellites circling around the globe, 70 percent are in the hands of large operators such as Intelsat, SES Global or Eutelsat to develop satellites to handle broadcasting services and telecoms.
PanAmSat shares have gained 10 percent in the past year, while shares of SES Global have advanced 84 percent.
The stock surged as much as $4.92, or 25 percent, to the equivalent of $24.72 in Germany from the Friday close of $19.80 in the US. It traded at $24.23 at 11.18am in Berlin.
- Bloomberg
August 30, 2005
By Vivek Shankar and Benedikt Kammel
San Francisco - Intelsat agreed to buy PanAmSat Holding for $3.2 billion (R20.7 billion) in cash to form the world's largest commercial satellite operator and gain broadcasting customers including Time Warner's CNN.
Intelsat, owned by four private equity firms including Apollo Management, will pay $25 a share for PanAmSat, the world's largest distributor of satellite-based television channels.
That is a 26 percent premium to PanAmSat's closing price of $19.80 last Friday in New York Stock Exchange composite trading. Intelsat said yesterday it would assume $3.2 billion of PanAmSat's debt.
Satellite operators including Intelsat and Luxembourg-based SES Global are seeking to cut costs and win more broadcasting customers as demand for advanced services such as high-definition TV and broadband internet increases.
The value of mergers involving satellite telecommunications companies tripled last year to $13.9 billion, according to data compiled by Bloomberg.
"Eliminating a competitor should be good for the pricing environment of the entire industry, and Intelsat can run their satellites more efficiently than before," said Thijs Berkelder, an analyst at Petercam, a Belgian brokerage.
"You can expect much more consolidation to take place."
Berkelder recommends that investors buy SES Global shares.
The combined company's sales would top $1.9 billion this year. The purchase is subject to regulatory approval. PanAmSat reported sales of $827.1 million in 2004.
Intelsat will increase the number of satellites it has to 53 from 28, offering coverage in more than 220 countries.
SES Global, the world's largest satellite broadcaster, operates 35 satellites.
PanAmSat this month said it planned to launch one and a half satellites a year on average to replace and upgrade its fleet.
Last month, it bought a satellite and two orbital slots from France's Alcatel to expand in the Middle East, Africa and Asia.
Berkelder of Petercam estimates that of about 270 commercial satellites circling around the globe, 70 percent are in the hands of large operators such as Intelsat, SES Global or Eutelsat to develop satellites to handle broadcasting services and telecoms.
PanAmSat shares have gained 10 percent in the past year, while shares of SES Global have advanced 84 percent.
The stock surged as much as $4.92, or 25 percent, to the equivalent of $24.72 in Germany from the Friday close of $19.80 in the US. It traded at $24.23 at 11.18am in Berlin.
- Bloomberg