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Report: Rachesky eyes sale of Loral

  • Loral (LORL +4.6%) gets its tail in the air as the NYPost reports Chairman Mark Rachesky - owner of 38% of the stock - is putting the company on the block. The hedge funder has reportedly put out feelers to potential buyers, but has not yet hired a banker.
  • A favorite of special situation/value players, Loral's principal asset is a 62% stake in Canadian satellite company Telesat. Rachesky turned down $6B for Telesat about three years ago and now - with four satellites launched since - reportedly believes it to be worth $10B (which would put Loral's value at north of $100 vs. $71.96 at the moment). Putting maybe a more realistic price of $7.25B on Telesat, SA Pro's Mike Arnold makes the case for Loral being valued at around $84 per share.
  • All of this excludes Loral's 56% stake in XTAR, which Arnold values at about $2 per share.
Comments (4)
  • Chris DeMuth Jr.
    , contributor
    Comments (4248) | Send Message
     
    It is a strong case. Here are my thoughts: http://seekingalpha.co.... This was one of favorite investment idea beneath $10/share (the other from the same year was http://seekingalpha.co... which we bought at $8). This has been an interesting situation to watch unfold. A number of my partners and colleagues are formerly from Loral, so it is often a lively topic around here.
    28 Oct 2013, 01:47 PM Reply Like
  • indomin123
    , contributor
    Comments (29) | Send Message
     
    We are based in Canada and have valued Telesat privately at between $9-10B; rumors bandied around about a potential RTO of LORL have since died out. Have you heard similar?
    29 Oct 2013, 10:23 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4248) | Send Message
     
    That Telesat valuation seems reasonable. The major issues with a potential RTO of LORL involve complex tax problems that need to be dealt with correctly.
    29 Oct 2013, 10:39 AM Reply Like
  • indomin123
    , contributor
    Comments (29) | Send Message
     
    The tax issue was also referenced when partner PSP was pushing for an IPO in late 2012. as well. Still, its interesting how many accountants Telesat has been hiring lately with 'SOX' and SEC filing/regulatory related experience - generally not a requirement here in Canada
    30 Oct 2013, 02:02 PM Reply Like
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