More positional play pre-Global Xpress

While a few lone voices in the satellite communications community seem determined to spend the majority of their time bemoaning the evolution of systems and services, others are preparing and positioning for it.

A case in point is the renewed interest by Cobham in Thrane and Thrane. Despite some rather obscurely-worded press releases (thanks IR department!), the nuts of this seems to be that Cobham, having been rebuffed earlier this year, has decided that its earlier offer of DKr420 per share is still good enough, now that now several institutional investors have helped it build its stake to 25%.

The news (and the press release) is somewhat passive-aggressive. Cobham says it normally only buys targets on the basis of 100% agreements, but in this case seems prepared to wait for Thrane’s management to come around. It has substantially sweetened the deal by promising to move its SeaTel marine antenna business to Thrane’s Lyngbo facility, while leaving the incumbent management in place, minus its chairman who resigned on 26 March.

In terms of stake requirement, Cobham has another 25% or so to go before it gets to the level it needs, but the company has said that it would be happy to start at that level and work towards 100% over time.

The offer has four weeks to run and comments made by Thrane management to the FT suggest that it too, is happy to wait to see if a white knight emerges. It’s clearly a risk, since Cobham, while describing its offer as final, says it reserves the right to increase it if a third party comes into play.

For Cobham, the logic of acquiring Thrane is undisputable. Itself a specialised manufacturer of C and Ku-band satellite terminals, Thrane’s expertise in the L-band space makes it a natural fit to position Cobham as the a leading supplier of next-generation services to the maritime industry.

Cobham has already made its first move, securing a $40 million contract as the first maritime partner for Inmarsat’s Global Xpress Ka-band broadband service, scheduled for availability by 2015. Before that date arrives – and even after it does, Cobham will be able to service XpressLink, the stepping stone to Global Xpress by bringing the businesses together.

Once Global Xpress gets into gear, it could be the major supplier of ground equipment, a prospect that must be as clear to Thrane’s management and investors as it is to those of Cobham.