Harbinger seeks to combine Inmarsat with SkyTerra

LONDON (Reuters) - U.S. hedge fund Harbinger plans to bid for British satellite communication firm Inmarsat , pending regulatory approval, and combine the group with its SkyTerra business, it said on Friday.

Harbinger, which already owns 28 percent of Inmarsat and, together with an affiliate, 48 percent of satellite communications group SkyTerra, said it was likely to take 12-18 months to obtain regulatory approvals.

A deal would help SkyTerra to develop an integrated satellite-terrestrial communications network to provide wireless coverage of the United States and Canada to consumer handsets.

Harbinger said that because of the need for, and uncertainty over, regulatory approvals, it was not able to announce the terms or structure of its potential offer.

Inmarsat said it remained confident of its own standalone prospects, but would carefully consider any offer.

At 12:25 p.m. GMT (8:25 a.m. EDT), Inmarsat shares were up 2.2 percent at 470.75 pence, valuing the firm at 2.2 billion pounds ($4.4 billion).

SkyTerra is the parent company of Mobile Satellite Ventures (MSV) which, along with Canadian joint venture partner Mobile Satellite Ventures (Canada) Inc, delivers mobile wireless voice and data services primarily for public safety, security, fleet management and asset tracking in the United States and Canada.

SkyTerra and MSV said in a statement that Harbinger had agreed to provide $500 million of debt financing to fund SkyTerra's business plan through the third quarter of 2010.

They also supported the move to combine with Inmarsat.

"The combination of SkyTerra and Inmarsat, assuming financial terms can be reached, makes a great deal of strategic and operational sense," SkyTerra's Chairman, CEO and President Alexander H. Good said in a statement.

SkyTerra and MSV said that, to provide equity financing for the offer, Harbinger might purchase newly issued shares of SkyTerra voting common stock for $2.4 billion in cash, or such other amount as Harbinger may determine.

The purchase price for the newly issued shares would be $10 per share subject to an adjustment relating to the price paid for each Inmarsat share, they said.

If the offer price for each Inmarsat share was greater or lower than 535 pence then the purchase price for the newly issued SkyTerra shares would increase or decrease proportionately, they added.

They stressed that the 535 pence a share and $10.00 a share prices were reference prices for the purposes of the arrangements between Harbinger and SkyTerra, and that 535 pence did not constitute a term or reference price for any offer.

Harbinger and Inmarsat said on Monday they had suspended talks on a possible takeover because of the time it would take to get regulatory approval, but that they remained open to a deal in the future.

(Reporting by Mark Potter; editing by Will Waterman and David Cowell)