LONDON (Reuters) - Shares in satellite firm Inmarsat (ISA.L) rose on expectations that Dish Network Corp’s bid for the spectrum assets of its U.S. partner LightSquared may lead to a resumption of payments to the British company under an airwaves-sharing deal.
Dish has offered $2 billion to LightSquared, which was backed by Philip Falcone’s hedge fund Harbinger Capital Partners, for its spectrum assets, a source said earlier on Tuesday.
LightSquared planned to build a new mobile network in the United States in part using Inmarsat’s airwaves, but its plan ran aground when the U.S. Federal Communications Commission objected that the new network would interfere with global positioning systems used by the military.
LightSquared, which was fighting for survival, suspended payments to the British company. A new deal could see the payments restart.
A spokesman for Inmarsat said: “Inmarsat is a supplier to LightSquared and is not party to these discussions, and we await the outcome with interest.”
Analysts at Jefferies said news of a possible deal was a “material step forward” in the LightSquared saga.
“A bull case for Inmarsat would argue that if Dish was to purchase LightSquared’s spectrum, then the cooperation agreement would pass over to Dish and there would be a chance that payments to Inmarsat under the agreement would ultimately begin again,” they said.
But equally they said Dish could shelve the cooperation agreement because it had enough spectrum from its recent purchases that it no longer needed Inmarsat’s spectrum.
Reporting by Paul Sandle; Editing by Louise Heavens