Intelsat facing potential shareholder action over C-band
March 5, 2020
By Chris Forrester
A report in the New York Post alleges that two important investors in Intelsat “partly escaped” the devastating collapse in Intelsat’s share price. The newspaper states that BC Partners and Silver Lake Partners, the two largest holders of Intelsat stock, “managed to sell a big chunk of Intelsat shares before the company’s hopes began to unravel”.
Intelsat shares during October and early November last year were trading at around $26. They are now at just $3.13. The shares started their dramatic collapse on November 6th 2019.
The report alleges that Intelsat’s CEO met with a senior FCC official on November 5th. This meeting was routinely reported by the FCC three days later. However, on November 6th, and before the FCC meeting was reported, Bloomberg News reported that Morgan Stanley had sold a 10 million block of Intelsat shares on behalf of clients – at $24.60 per share.
It is being alleged that Morgan Stanley acted on behalf of BC Partners and Silver Lake. BC Partners held 2 seats on the Intelsat board of directors. BC Partners confirmed that it sold some 8.3 million shares in the quarter-year to December 31st.
The New York Post says that the November 5th meeting between Intelsat’s CEO and the FCC was key, and where the CEO allegedly heard that the FCC was going to rule on an FCC-organised auction of C-band assets. On November 8th – and again prior to the FCC routine announcement of the November 5th meeting – Intelsat submitted a revised proposal to the FCC (which was rejected by the FCC on November 18th).
Intelsat told the newspaper that it does not reveal private discussions with its directors. A statement from BC Partners to the New York Post said: “The sales in question were executed based solely on available public information at the time and were executed in full compliance with all relevant market rules and regulations.”
The Post is reporting that other Intelsat investors are concerned and demanding that the share sale be investigated. One securities lawyer told the newspaper that the powerful Securities & Exchange Commission would open an inquiry into the share movements. Another, a hedge fund investor, confirmed to the newspaper that they were talking to lawyers about possible legal action.