The £2.6 billion private equity takeover of UK satellite firm Inmarsat has cleared a major hurdle after a challenge to the sale was dropped.
A group of hedge funds had been due to object to the acquisition by a private equity consortium, involving Apax Partners, Warburg Pincus and Canadian pension funds, in a court hearing on Tuesday morning.
However, Oaktree, Kite Lake and Rubric Capital dropped their opposition after the buyers confirmed they would not increase or extend their offer.
The funds previously said they wanted a judge to block the takeover, arguing that the price did not reflect the value of Inmarsat’s contract with Ligado, a US broadband business which licenses some of the satellite group’s airwaves.
Inmarsat told investors on Tuesday that it had received confirmation from the funds’ law firm that they “no longer intend to raise objections” to the sale.
On Monday, the purchasing consortium said it would not increase its cash offer and believed there was no change in the potential for Ligado to make payments under its current contract.
Inmarsat, the UK’s largest satellite company, recommended the deal in March and the move was later cleared by government.
Shareholders also decisively backed the deal, with nearly 79% of investors voting in favour of the acquisition in May.
The company, which is based near Old Street in central London, was initially founded as a marine safety and security business by the UN in the 1970s.
The climb-down over the court hearing means the takeover is expected to be rubber-stamped at the court hearing scheduled for Tuesday and Wednesday.