The board of Spacecom Satellite Communications Ltd. (TASE:SCC) today rejected the offer to purchase by SES SA (Euronext; Luxembourg: SESG) and sent the competing offer by Eurocom Group to the company's shareholders.
Spacecom gave three reasons for rejecting SES's offer. First, SES wanted to only buy the company's Amos 1, 2, and 3 communications satellites, but not the Amos 4. The board did not approve of an offer that distinguished between the company's businesses and is liable to affect its future growth and development. Second, the board felt that SES's offer at a value of $100 million for Spacecom's assets that it wanted to buy did not reflect the real value of the assets. Third, the board found that the conditions SES stipulated for a deal "created a heavy burden and put the chances of closing a deal at risk".
As for the bid by Eurocom, which arrived before the bid from SES, Spacecom's board decided to "refrain from expressing an opinion as to whether the offer is worthwhile." The board has sent the offer to the company's shareholders, which include Eurocom, citing three reasons for this decision.
First, Spacecom lacks a comprehensive outside economic opinion regarding the value of the company and its shares. Second, the company's major shareholders do not agree on a response to the offer. Third, if the other shareholders accept Eurocom's offer, it will become the dominant shareholder in the company, with a stake larger than 45%.
Spacecom noted, "Eurocom has not provided specifics about its intensions for the company, so the board has no way of assessing the impact of the change in Eurocom's holding in the company on it or on its value."
Published by Globes [online], Israel business news - www.globes-online.com - on February 7, 2008
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